## ppea2022032 ## Source details **Canonical URL:** [ppea2022032](https://www.imf.org/-/media/files/publications/pp/2022/english/ppea2022032.pdf) ## Other formats - [Markdown version](/-/media/files/publications/pp/2022/english/ppea2022032.pdf.md) - [Structured JSON version](/-/media/files/publications/pp/2022/english/ppea2022032.pdf.json) --- ### EXECUTIVE SUMMARY — Context and mandate - A Working Group on Data and Analysis Integrity (WGDAI) established as part of the Fund’s institutional safeguards review to assess safeguards for data and analysis integrity. - Paper presents overview of existing frameworks and processes, identifies pressure points, and lays out high-level findings and recommendations. - Date on document: May 3, 2022. ### Supporting Data Integrity — Inputs, frameworks, and challenges - Data sources and staff use: - IMF primarily uses data supplied by its membership; Articles of Agreement compel members to supply certain information. - Official data compiled mainly by national statistical offices, central bank/financial regulators, and ministries of finance; members also provide extensive voluntary information. - Fund supplements official data with ‘third party indicators’; staff generate estimates, projections, and analytical constructs that may themselves be treated as data. - STA role and tools: - STA co-authors virtually all statistical methodologies for macroeconomic and financial statistics as standard setter. - Tools and instruments include targeted capacity development (CD), Data ROSCs, Data Dissemination Initiatives (e-GDDS, SDDS, SDDS Plus), and routine staff checks for consistency and outliers. - Observations and challenges: - In only slightly over 20 cases staff assessed official data to suffer from serious shortcomings that significantly hamper surveillance. - For at least five years there have been no breaches of obligations arising from inaccurate data provision for surveillance purposes (though one case of persistently late provision occurred). - Statistical methodologies require continual updating; Fund needs more data at higher frequency and granularity. - Latest review of the Fund’s data provision policy is currently underway. ### Staff Analysis — Purpose, approach, and pressure points - Purpose of staff reports: - Provide expert, independent, technical basis for Board decisions and inform membership and stakeholders. - Analytical approach: - Combine data analyses, analytical tools (e.g., ESAs, DSAs), and informed judgement; dialogue with authorities, academics, civil society, and markets is important. - Forecasting: - Forecasts built around a baseline scenario; staff explore balance of risks. - Forecasts and vulnerability analyses underpin staff recommendations and policy settings. - WEO process: “bottom-up” country team projections complemented by “top-down” in-house model guidance; semi-annual process for all countries, quarterly for a core set. - Undue pressure: - Nature varies from exchanging information to pressure that influences staff reports without substantive justification (implicit/explicit intimidation, lobbying key decision-makers, withholding information). - Survey for Institutional Safeguards review: 18 percent of Fund staff reported that their work had been unduly influenced (i.e., undermining analytical integrity). - Past experience and expectations of undue pressure can lead to self-censoring. ### Supporting Integrity of Staff Analysis — Review and clearance nodes - Four key transition points (“nodes”) examined: 1. Clearance by authoring departments. 2. Interdepartmental review and clearance. 3. Management clearance. 4. Board and authorities’ engagement. - Key observations: - Internal clearance and interdepartmental review operate within Fund policies, but pressures can still arise. - Topic selection guided by Fund policies but leaves room for staff judgement; risks include selecting institutionally important topics less justified for a country, or minimizing sensitivities with authorities. - Fund culture tends not to sufficiently incentivize staff to voice dissenting views. - Interdepartmental review can mitigate risks by ensuring evenhanded analysis focused on core mandates. - Management’s dual role (head of staff and Chair of the Board) means Management takes a range of considerations into account; country authorities may seek to exert pressure on Management. - Transparency Policy: once a document has been circulated to the Board, the Transparency Policy limits modifications to staff reports to specific circumstances; country authorities can decline to allow publication of documents about their countries. ### Findings — Overall assessment - Strong frameworks and processes exist to support integrity of data and analysis at the Fund. - Staff rely on a variety of data sources, apply quantitative tools and informed judgement to arrive at policy recommendations. - Interdepartmental review systematically examines and comments on reports. - Areas for improvement identified: - Clarify role of Management and Offices of Executive Directors (OED) in staff conduct of analyses. - Strengthen mechanisms for staff to raise concerns where analytical integrity may have come under undue pressure. - Ensure evenhanded coverage of new and emerging areas based on objective criteria. - Improve transparency and documentation of the internal review system, particularly as the Integrated Digital Workplace (IDW) is implemented. - OIA to benchmark other institutions over the course of FY23 to prepare for subsequent audit of internal review adaptation to IDW. ### Selected Recommendations and impacts (selected items from Table 1) 1. Clarify Terms of Engagement of OED with Staff in Staff’s Conduct of Analysis - Proposals: - (i) Engage with the Board to clarify and formalize terms of engagement with staff. - (ii) Strengthen mechanisms for staff to raise concerns about undue influence (in coordination with WGIGSV). - Input: OMD, LEG, SEC, ADs and SPR. - Impact on Analytical Integrity: High - Estimated Cost: Medium 2. Clarify Role of Management in Clearance of Staff Papers and Positions - Proposal: Codify and document best practices and enhance transparency around clearance of policy notes and staff reports. - Input: OMD, LEG, ADs, and SPR. - Impact on Analytical Integrity: High - Estimated Cost: Low 3. Complete Ongoing Work to Ensure Evenhanded Coverage of Emerging Areas in Surveillance - Proposal: Draft guidelines on coverage of emerging areas. Led by SPR with respective groups and reflected in guidance notes. - Impact on Analytical Integrity: Medium - Estimated Cost: Medium 4. Strengthen Transparency and Documentation of Internal Review Process and Assess Adaptation to IDW - Proposals: - (i) SPR to draft guidelines for endorsement by OMD. - (ii) OIA to conduct an audit on how internal review adapted to IDW; OIA to conduct benchmarking with other institutions over course of FY23 to lay groundwork. - Impact on Analytical Integrity: Low - Estimated Cost: Medium ### Implementation and next steps - Some recommendations require further consideration and discussion to refine into actionable proposals drawing on Institutional Safeguards review. - OIA to conduct benchmarking with other institutions over course of FY23 to prepare for subsequent audit. - WGDAI findings intended to inform wider discussions and complement the Board Steering Group’s work. *Source: EXECUTIVE SUMMARY, "DATA AND ANALYSIS INTEGRITY AT THE FUND: STOCKTAKING AND RECOMMENDATIONS", May 3, 2022.* --- ### 1. IMF Forecasts — Additional background and processes - WGDAI mandate reiterated: take stock of current framework, ascertain need for changes, assess roles/responsibilities, and recommend actions. - Use of official data, third-party indicators (TPIs), and staff-generated estimates emphasized. - Third-Party Indicators: - Use subject to Fund’s TPI policy. - An internal TPI Digest documents characteristics, strengths, weaknesses, and guidance. - Interim guidance after World Bank paused Doing Business (August 2020) asked staff to cease its use; discontinuation in September 2021 made guidance permanent. ### Macroeconomic forecasts — inputs, risks, and communication - Forecasts: - Built around baseline anchored on authorities’ established policies; UFR contexts assume full implementation of authorities’ policies. - Should be complemented by qualitative/quantitative assessment of risks; tools include growth-at-risk, contingency/scenario planning. - Forecast process: - Bottom-up country team projections and top-down model guidance iterate toward convergence reported in WEO. - Interdepartmental review provides scrutiny and checks. - Risks: - Forecasts often focal points; differences between Fund, authorities’, and consensus forecasts can attract media and pressure staff. ### Analytical tools — ESAs and DSAs - Examples: External Sector Assessments (ESAs) and Debt Sustainability Analyses (DSAs) are Board-endorsed methodologies with guidance notes to enhance transparency and evenhanded application. - Tools depend on data quality; any tool based on macro forecasts inherits their challenges. - Guidance notes set boundaries for judgement but do not fully resolve tensions around judgement application. --- ### Box 2 — External Sector Assessments (ESAs) — integrity issues (summary) - ESAs cover five main areas: current accounts; real exchange rates; capital flows and policy measures; foreign exchange intervention and reserve levels; external balance sheets. - Core tools: EBA and EBA-lite methodologies underpin CA and REER assessments. - Model choice and adjustors: - Teams have discretion on anchor model; continuity in anchor choice expected unless circumstances change. - Adjustors may be applied when models cannot capture country specifics; any adjustors expected to be transparently presented with clear justification. - Pressure points: - Choice of anchor model, use/presentation of quantitative adjustors, and sensitivity around qualitative overall assessment during internal review and Board discussions. - Safeguards: - Guidance, training, and internal review support transparent and evenhanded application of judgement. --- ### Interdepartmental Review Process (Box 4) — practices and limitations - Historical reforms and current eReview platform: - eReview introduced in 2009; captures milestones from first draft to final version sent to Management. - Limitations: many documents reviewed outside eReview; side discussions and how comments were addressed often via email and not captured; search and collaboration capabilities limited. - IDW replacement expected; historical database and review comments should be migrated. - Roles and documentation: - SPR co-signs all country reports with Area Departments; SPR senior reviewer’s signature indicates SPR has reviewed and finds report satisfactory. - If SPR has reservations that Management rejects, masthead signature without noting reservations is legally not permitted unless reservations explicitly noted in report; alternative is to send report to Board without SPR signature. - Management adjudication and transparency: - Management expected to adjudicate unresolved interdepartmental disagreements, provide general guidance, and bring strategic considerations; Management may overrule staff recommendations. - When Management engages with authorities or OED, mission chiefs and/or senior area staff should generally participate. - Only Management-cleared documents can be issued to the Board; Member authorities’ consent not needed for circulation to Board. - Board dynamics: - Executive Directors have dual role; scope exists for OED attempts to exercise undue influence. Fund culture of consensus building can disincentivize staff pushback. - Need to strengthen mechanisms for staff to raise concerns about undue pressure from OED. --- ### Box 6 — Transparency Policy (as applied to country documents) — key points - Paramount principle: staff reports must not be negotiated with country authorities; Transparency Policy supports safeguarding independence of staff views. - Publication regime: “voluntary but presumed” for country documents; publication subject to member consent. - Permitted modifications after Board circulation limited to corrections for typographical/factual errors or deletions of highly market-sensitive or premature policy information. - For policy staff reports: staff may revise where staff modified views in light of Board discussion or significant new developments, but not after relevant Board decision; staff report cannot be modified to take into account Board’s views unless staff and Management share those views. --- ### Annex II — Debt Sustainability Framework for Low-Income Countries (LIC DSF) — key elements - Purpose and structure: - Standardized DSAs producing tables and charts based on 20-year macro projections and borrowing strategy. - Relevant debt-related indicators calculated under baseline and stress tests; mechanical risk rating informed by first 10 years. - Inputs and tools: - Required inputs: country characteristics, debt coverage, key macro/debt data and assumptions, financing terms, standardized and tailored stress tests. - One input sheet compatible with DMX; additional analytical tools and four realism tools linked to standard inputs. - Realism tools: - Four realism tools: (i) drivers of debt dynamics; (ii) fiscal adjustment in primary balance; (iii) fiscal adjustment and possible growth paths; (iv) public investment and economic growth. - Purpose: flag deviations from experience and encourage reassessment of baseline projections. - Composite Indicator (CI) and thresholds: - CI generated as weighted sum of factors: World Bank CPIA score, country real growth, international reserves, remittances, world growth. - CI uses ten-year averages (five years history and five years projections). - Stress tests: - Battery includes standardized stress tests, tailored stress tests, contingent liabilities test, and optional fully customized scenarios. - Size of shocks for standard stress tests is generally the smallest between the baseline minus one standard deviation or historical (ten years) average minus one standard deviation. - Mechanical risk rating: - Outputs include PV of external debt/GDP, PV of external debt/exports, debt service/revenue, debt service/exports, PV of total public debt/GDP. - Mechanical signals (low, moderate, high, in distress) derived by comparing indicators to thresholds under baseline and most extreme stress test. - Final assessment: - Combines mechanical signals with judgement; external debt distress risk rating primary output; overall risk rating supplementary. --- ### Annex IV — External Sector Assessment analytical tools (EBA, EBA-lite, reserve metrics) - EBA: - Covers 52 advanced and emerging market economies; launched 2012; three empirical models (current account model and two REER models). - EBA-lite: - Developed 2015 for rest of membership; two empirical models (current account and REER index). - Transparency and inputs: - EBA econometric model results publicly available; EBA data and sources detailed on IMF website; data and codes provided for public use. - SPR maintains central repository of EBA-lite templates used in staff reports but lacks visibility of desk changes between WEO updates and final assessments. - Use of adjustors: - Adjustors appropriate for temporary disruptions or data discrepancies; use can be pressure point if not well-justified or transparently presented. - Reserve adequacy metrics: - ARA metric for EMs is an additional tool; methodology published and updated regularly; staff expected to report unadjusted metric and transparently explain any adjustments for country specifics. --- ### Annex V — WGDAI terms of reference and procedures (summary) - Mandate: examine roles/responsibilities at key steps in handling data and undertaking technical analysis; recommend actions to ensure integrity. - Process: - Consult area and functional departments, Board Steering Group, WGIGSV; organize focus groups (December 2021); circulate draft via eReview on February 24, 2022. - Secretariat organized focus groups, townhall (February 15, 2022), and office hours; draft shared with IEO and departments; departmental comments incorporated. - Outputs: findings intended to inform Steering Group’s report to Executive Board by 2022 Spring Meetings. --- ### EXTERNAL PANEL — Review of the IMF’s Dispute Resolution System (DRS) — Executive summary (June 9, 2022) ### Purpose, scope, and composition - Independent Panel appointed January 2022; report submitted mid-May 2022; Executive Summary dated June 9, 2022. - Panel members: Susan Raines, Olufemi Elias, Jens Weidmann (Chair); supported by Ruben Lamdany (Advisor) and Secretariat staff. - Mandate: benchmark and evaluate Fund’s DRS and recommend improvements. ### DRS structure — pillars and components - Three pillars: informal services, formal services, ethics and integrity. - Components include: - Informal: Ombudsperson, Mediator, Peers for a Respectful Workplace (PRW). - Formal: two-tier Administrative Review (HRD), Grievance Committee (GC), Administrative Tribunal (AT); contractual employees may request arbitration as final step after administrative review. - Ethics/integrity: Ethics Office, Office of Internal Investigations (OII). - Framework applies to Managing Director and Executive Board. ### Key findings — systemic issues and cultural factors - Multiple channels and appropriate policies exist, but important issues inhibit smooth/effective DRS functioning. - Cultural and behavioral factors: - Multicultural institution with differing approaches to expressions of concern contributes to reluctance to use DRS. - Many staff reluctant to complain or raise legitimate issues due to fear of retaliation. - Prevention emphasized: - Staff should know rules/policies; greater transparency on cases, findings, and disciplinary sanctions (balanced with confidentiality) will increase trust and accountability. - Process and timeliness: - Panel recommends expedited handling, strict adherence to deadlines, and overhaul of Grievance Committee process to speed administration of justice. - Resourcing and organizational issues: - Creation of new HRD functions for early conflict resolution recommended. - Provision of lawyers to represent staff recommended. - Organizational changes recommended for Executive Board’s Ethics Committee composition. ### Pulse Survey and evidence base - Pulse Survey (February 2022): - Total responses: 1,599 (almost 40% of all employees); completed in full: 1,393; partially completed: 206. - Selected results (in percent): - I can report unethical behavior without fear of reprisal. — Unfavorable 32; Neutral 22; Favorable 47 - I would feel comfortable approaching management above me... — Unfavorable 31; Neutral 21; Favorable 48 - When it comes to being candid, I feel comfortable ‘speaking truth to power’ at the Fund — Unfavorable 38; Neutral 23; Favorable 39 - In my opinion, my work is not unduly influenced... prior to finalization. — Unfavorable 18; Neutral 0; Favorable 82 - I feel I can express dissenting views to my manager, without fear of retaliation — Unfavorable 22; Neutral 19; Favorable 60 - Bullying/Discrimination/Sexual Harassment (in percent): - Observed Bullying/Intimidation in past 5 years — Yes 38; No 62 - Observed Discrimination in past 5 years — Yes 30; No 70 - Observed Sexual Harassment in past 5 years — Yes 5; No 95 - Experienced Bullying/Intimidation in past 5 years — Yes 21; No 79 - Experienced Discrimination in past 5 years — Yes 26; No 74 - Experienced Sexual Harassment in past 5 years — Yes 3; No 97 - In instances where response was YES, proportion of staff who reported the incident — 31; 69 (i.e., 31 reported; 69 did not) - In instances reported, proportion satisfied with outcome — 26; 74 (i.e., 26 satisfied; 74 not satisfied) - Historical context: - 2012 Fund-wide survey: 660 staff (~20% employees) responded; similar concerns re fear of retaliation and lack of confidence in DRS. ### Principal Panel recommendations (selected, high-level) - Leadership and standards: 1. Standards, procedures, and rules for Managing Director and Executive Directors should be higher than those for staff. 2. MD and DMDs should publish yearly the type of financial assets they hold. 3. OED personnel should have access to full DRS, including informal mechanisms. 4. Change Ethics Committee composition to include majority non-Board members of high standing in ethics matters. 5. MD and Executive Board should lead culture change with visible messaging and action. - Retaliation measures (recommendation 8, subpoints): 8.i. Amend rules to require alleged wrongdoer to explain actions did not have retaliatory motive. 8.ii. Where Independent Review concludes retaliation occurred, determination should be considered in performance evaluations. 8.iii. Where Independent Review concludes retaliation occurred, require an investigation for individual responsibility. 8.vii. Extend period for access to Independent Review to 3 years from alleged retaliatory act. 8.viii. Monitor effectiveness of measures via more frequent external surveys. - Transparency and access: 9. Publish outcomes of cases considered by Executive Board’s Ethics Committee to staff via intranet; promptly resume Administrative Review and GC publications. 10. Consolidate DRS information on single intranet page; create toolkit for self-represented employees; post real-time case tracker on secure intranet showing nature of complaints, timelines, substantiation status, recommended and actual consequences. - Strengthening DRS offices/processes: 11. Implement 2021 DRS employment framework changes to allow conversion to staff positions with full benefits. 12. OII should not require authorization from Management or HRD before investigating; create Terms of Reference for OII. 13. Centralize investigations with OII; departments should not conduct independent investigations. 14. Heads of DRS offices should report to Executive Board at least once a year and meet MD as needed. 15. OIA should be independent; abolish requirement for its work plan to be approved by management; establish internal Audit Committee of Executive Board for direct OIA reporting. - Organizational culture and prevention: 18–31. Series of recommendations to err on side of transparency for substantiated misconduct, visible penalties for wrongdoing, MD-hosted roundtables, Executive Board engagement on data integrity, Culture Change Program, Ethics Ambassadors, and managerial accountability. - Earlier, less formal resolution: 32–34. Create Employee Relations Unit within HR; require problem-solving conversations facilitated by Employee Relations Specialist/Mediator/Ombudsperson prior to escalation; offer transparent learning from AT cases. - Fairness and efficiency: 35. Establish an internal office to provide lawyers who represent and advise staff in DRS processes. 37. Implement short, enforced timelines (e.g., 20 days for performance disputes) with consequences for missed timelines; Grievance Committee and AT should weigh missed Fund timelines when making awards. 42. All employees (including contractual) should enjoy the same access to all DRS offices, including GC and AT. ### Timeliness and resourcing findings - Administrative Review timeliness: - Staff noted chronic delays; average periods for Director-level reviews: 47 days in 2016; 104 days in 2017; 106 days in 2018. - Longest review periods: 79 days (2016), 282 days (2017), 173 days (2018). - Grievance Committee: - Average duration: 428 days. - Panel recommends make process less “judicial” and quicker; limits on pleadings and discovery; missed timelines to result in adverse inference benefiting complainant. - Administrative Tribunal: - Average period between submission of final pleading and judgment: approximately 296 days. - Average total duration cited in prior OIA review: administrative review 62 days, GC 428 days, AT 301 days; total 791 calendar days. ### OII, Ethics Office, Ombudsperson, Mediator — observations - OII: - Investigations can be lengthy; OII must currently request authorization from MD or Director HRD to undertake full investigations. - Panel recommends OII be able to decide to investigate without authorization and be adequately resourced. - OII annual reports (2016–2020): harassment largest complaint category with 84 claims. - Ombudsperson and Mediator: - Both are independent informal offices with concerns about contractual employment terms and restricted access (OED staff excluded from Ombudsperson Terms of Reference). - Panel recommends strengthen role, status, resourcing, and access; provide Heads choice to convert to staff-like benefits per 2021 approvals. - Ethics Office: - Ethics Advisor reports to MD; 2021 changes authorized conversion to staff-like benefits for future appointees; Panel recommends Ethics Office annual report be presented to and discussed with Executive Board. ### Transparency, reporting, and follow-up - Annual Administrative Review reports have not been issued for calendar years 2019–2021; Panel recommends reinstatement. - Panel recommends consolidated intranet, toolkit, real-time case tracker, and publication of anonymized outcomes and consequences for substantiated allegations to build trust and accountability. - Follow up: - Management to prepare specific monitorable implementation plan and submit to Executive Board within three months of Board discussion; Panel welcomes joining Board discussion and OIA to prepare annual progress report. *Source: EXECUTIVE SUMMARY, "EXTERNAL PANEL OF EXPERTS’ REVIEW OF THE IMF’S DISPUTE RESOLUTION SYSTEM", June 9, 2022.* ### EXECUTIVE SUMMARY ### EXECUTIVE SUMMARY ### Context and mandate - A Working Group on Data and Analysis Integrity (WGDAI) was established as part of the Fund’s institutional safeguards review to assess the need for changes in processes safeguarding the integrity of data and analysis at the Fund. - Paper presents an overview of existing frameworks and processes, identifies pressure points, and lays out high-level findings and recommendations. - Date on document: May 3, 2022. ### Supporting Data Integrity - The IMF primarily uses data supplied by its membership; the Fund’s Articles of Agreement compel members to supply certain information. - Official data are compiled mainly by national statistical offices, central bank/financial regulators, and ministries of finance; members also provide extensive voluntary information beyond mandated reporting. - The Fund supplements official data with ‘third party indicators’ as needed; staff generate estimates, projections, and analytical constructs that may themselves be treated as data. - IMF Statistics Department co-authors virtually all statistical methodologies for macroeconomic and financial statistics in its capacity as a standard setter. - Tools and instruments supporting data integrity include: - Targeted capacity development (CD) on statistical issues. - Reports on the Observance of Standards and Codes (Data ROSCs). - Data Dissemination Initiatives to widen access and allow outside scrutiny. - Routine staff checks for consistency and outliers in reported data. - Observations and challenges: - In some 20 countries official data have been assessed by staff as having serious shortcomings that significantly hamper surveillance; in most cases this reflects capacity constraints being addressed through CD. - Statistical methodologies need continual updating to reflect economic change and innovation. - The Fund increasingly needs more data—covering more areas, at higher frequency and with more granularity. - The latest review of the Fund’s data provision policy is currently underway. ### Staff Analysis - Staff reports are the Fund’s principal written output, combining data, factual evidence, staff analysis and policy advice to convey staff’s views clearly and candidly. - Objectives of staff analysis: - Provide an expert, independent, technical basis for Board decisions. - Offer the Fund’s membership and stakeholders independent reasoned analysis to inform decisions. - Analytical approach: - Staff apply data analyses and analytical tools coupled with informed judgement to arrive at balanced assessments and policy advice, drawing on peer learning and other country cases. - Continuous dialogue with a wide range of stakeholders (authorities, academics, civil society, financial market professionals) is important to surface evidence and tailor advice. - Two illustrative elements central to country work: - Consistent forecasts of macroeconomic variables: - Forecasts are built around a baseline scenario; staff reports also explore the balance of risks given inherent uncertainties. - Forecasts and vulnerability analyses form the basis for staff recommendations, including proposed changes to macroeconomic policy settings. - Use of analytical tools: - Examples include External Sector Assessments (ESAs) and Debt Sustainability Analyses (DSAs). - ESAs and DSAs are based upon Board-endorsed methodologies and supported by guidance notes to enhance transparency and the evenhanded application of tools, including appropriate reliance on judgement. - Undue pressure on staff analysis: - Nature varies and is difficult to measure; ranges from exchanging information and offering alternative views to exerting pressure that influences staff reports without substantive justification (e.g., implicit or explicit intimidations, lobbying key decision-makers, or withholding information). - Past experience and expectations of undue pressure can lead to self-censoring. - Undue pressure can occur across the Fund’s core functions (surveillance, the use of Fund resources, or capacity development). - In a survey for the Institutional Safeguards review, 18 percent of Fund staff reported that their work had been unduly influenced (i.e., undermining analytical integrity). ### Supporting the Integrity of Staff Analysis: Review and Clearance Processes - The Working Group examined four key transition points (“nodes”) where integrity can be reinforced or undermined: 1. Clearance of documents by authoring departments. 2. Interdepartmental review and clearance. 3. Management clearance. 4. Board and authorities’ engagement. - Key observations: - Internal clearance and interdepartmental review processes operate within Fund policies and practices, but pressures can still arise. - Topic choices in staff reports are guided by Fund policies but leave room for staff judgement. Risks include: - Selecting topics important to the institution as a whole but less justified for a specific country (e.g., emerging issues like climate and digitalization). - Selecting topics that minimize sensitivities with country authorities. - Fund culture tends not to sufficiently incentivize staff to voice dissenting views. - Interdepartmental review can mitigate risks through careful scrutiny to ensure evenhanded analysis focused on core mandates. - Management clearance is necessary before circulation to the Executive Board; Management’s dual role (Managing Director as head of staff and Chair of the Board) means Management takes a range of considerations into account. - Country authorities may seek to exert pressure on Management to influence outcomes. - Board engagement is guided by policies that promote two-way dialogue while respecting staff independence; Executive Directors have a fiduciary duty to act in the interest of the institution but may communicate constituency views to the Board, Management and staff. - There may be scope for individual Board offices or representatives to attempt to exercise undue influence. - The Fund’s culture of consensus building can disincentivize staff pushback; mechanisms to raise concerns about undue pressure need strengthening. - The Transparency Policy is a key safeguard: once a document has been circulated to the Board, the Transparency Policy limits modifications to staff reports to specific limited circumstances and ensures that, in case of disagreement, the Board’s views are reflected in the summing up and highlighted in the final document. Country authorities can decline to allow the Fund to publish documents about their countries. ### Findings and Recommendations (high-level) - Overall assessment: - Strong frameworks and processes are in place to support the integrity of data and analysis at the Fund. - Staff rely on a variety of data sources, apply quantitative tools, frameworks, and informed judgement to arrive at policy recommendations. - Processes and practices have evolved over time and are periodically reviewed; interdepartmental review systematically examines and comments on reports. - Areas for improvement: - Clarify the role of Management and Offices of Executive Directors (OED) in staff conduct of analyses. - Strengthen staff’s voice where they feel analytical integrity may have come under undue pressure. - Ensure evenhanded coverage of new and emerging areas based on objective and clearly communicated criteria. - Improve transparency and documentation of the internal review system, particularly as the Integrated Digital Workplace (IDW) is implemented. - Office of Internal Audit (OIA) should assess how the internal review process has adapted to IDW; to lay groundwork, OIA should conduct a benchmarking exercise with other institutions over the course of FY23, with the exact scope of the subsequent OIA audit finalized later. ### Table of Recommendations and Findings (selected items from Table 1) 1. Clarify the Terms of Engagement of OED with Staff in Staff’s Conduct of Analysis - Proposals: - (i) Engage with the Board to clarify and formalize the terms of engagement with staff. - (ii) Strengthen the effectiveness of mechanisms for staff to raise concerns about undue influence (in coordination with WGIGSV). - Input: from OMD, LEG, SEC, ADs and SPR.; consultation with other departments as needed. - Impact on Analytical Integrity: High - Estimated Cost: Medium 2. Clarify the Role of Management in the Clearance of Staff Papers and Positions - Proposal: Codify and document best practices and enhance transparency around clearance of policy notes and staff reports. - Input: from OMD, LEG, ADs, and SPR.; consultation with other departments as needed. - Impact on Analytical Integrity: High - Estimated Cost: Low 3. Complete Ongoing Work to Help Ensure Evenhanded Coverage of Emerging Areas in Surveillance - Proposal: Draft guidelines on coverage of emerging areas. Led by SPR with respective groups and reflected in the guidance notes. Consultation with other departments as needed. - Impact on Analytical Integrity: Medium - Estimated Cost: Medium 4. Further Strengthen the Transparency and Documentation of the Internal Review Process, and Assess how it has Adapted to the Integrated Digital Workplace (IDW) - Proposals: - (i) Guidelines to be drafted by SPR, in consultation with other departments, for endorsement by OMD. - (ii) Audit (by OIA) on how the internal review process has adapted to the implementation of the Integrated Digital Workplace (IDW). - Impact on Analytical Integrity: Low - Estimated Cost: Medium ### Implementation and next steps - Some recommendations will require further consideration and discussion to be refined into actionable proposals, drawing on work across the Institutional Safeguards review. - OIA to conduct a benchmarking exercise with other institutions over the course of FY23 to prepare for a subsequent audit whose scope will be finalized later. - The Working Group’s findings are intended to contribute to wider discussions and complement the Board Steering Group’s work. Approved by Louis Marc Ducharme, Ceyla Pazarbasioglu, and Rhoda Weeks-Brown. Prepared by a team supporting the Working Group on Data and Analysis Integrity (WGDAI) comprising Fabian Bornhorst, Gavin Gray, David Hart, Sanjaya Panth (all SPR), and J. R. Rosales (STA) with inputs from other departments. *Source: EXECUTIVE SUMMARY, "DATA AND ANALYSIS INTEGRITY AT THE FUND: STOCKTAKING AND RECOMMENDATIONS", May 3, 2022.* ### 1. IMF Forecasts—Additional Background______________________________________________________________ 21 ### 1. IMF Forecasts—Additional Background ### Context - In November 2021, Fund Management established a Working Group on Data and Analysis Integrity (WGDAI). - Mandate of the WGDAI: - take stock of the current framework for data and analysis integrity; - ascertain whether changes to processes and procedures governing data integrity are warranted; - assess if roles and responsibilities in key internal processes need clarification; - put forward recommendations. - WGDAI inputs and consultations: - drew on expertise from across the Fund and perspectives of stakeholders inside and outside the institution (see Annex V); - used detailed discussions with focus groups of staff from across the Fund; - draft paper was extensively reviewed by departments; - benefited from discussions with the Board Steering Group, interactions with the IEO, and the parallel group on Internal Governance and Staff Voice (WGIGSV); - included discussions with senior officials from other international financial institutions producing analytical outputs. - Purpose and organization of the document: - lays out frameworks and principles in place at the Fund to help ensure data integrity, recognizing that data used in core work are, for the most part, provided by national authorities; - examines the intersection between data and Fund analysis with focus on forecasting and on external sector and debt sustainability assessments; - presents institutional processes for reviewing and clearing staff analysis for Board documents, focusing on key transition points ('nodes') where integrity could be enhanced or undermined; - presents WGDAI findings and recommendations, noting some recommendations require further consideration and discussion to be refined into actionable proposals under the Institutional Safeguards review. - Definition used in the exercise: the Working Group assessed analytical integrity by examining safeguards related to the scope, quality and independence of staff analysis and policy advice. - Note: Fund staff primarily use official sources but also draw on third-party indicators where needed; the Fund produces estimates and analytical constructs derived from member-provided information. ### Supporting the Integrity of Staff Analysis: Data (overview) - Section summarizes principles and frameworks that sustain data integrity in production of official statistics and Fund staff efforts to promote data integrity among compilers in member countries. - Reviews internal procedures and processes to monitor official data provided to the Fund and assess conformity with integrity expectations. - Concludes with a brief discussion of use of Third-Party Indicators. ### A. Official Data—An Essential Input - Most data used by the Fund to discharge core responsibilities are official data supplied by compilers in member countries (statistical offices, central banks/financial regulators, ministries of finance). - Data provision framework: - Article VIII, Section 5—and related Board decisions—stipulate the minimum data that must be provided to the Fund for its activities. - The associated data provision framework is reviewed periodically by the Executive Board; the latest review of Data Provision to the Fund for Surveillance Purposes is currently underway. - Staff use of official data: - Primarily drawing on official data, the Fund produces estimates and analytical constructs, some of which can be viewed as data in their own right. - Where needed, staff also make use of so-called third-party indicators (see para 19–20). ### B. Integrity—A Pillar of Data Quality - Data quality dimensions include technical/methodological, legal, and integrity aspects. - IMF’s Data Quality Assessment Framework endorsed by the Executive Board in 2001 and 2012; fully congruent with the U.N.’s Fundamental Principles of Official Statistics adopted in 2014. - Integrity expectations (as described): - statistical production should be (i) completely devoid of political interference; (ii) absolutely impartial; and (iii) conducted by professionals whose recruitment and promotion are uniquely focused on excellence, with exclusive regard for stellar experience, technical, and academic credentials. - Data integrity requirements: - absence of political interference; - observance of internationally accepted methodologies; - data validation using standardized statistical protocols to correct aberrant and inconsistent values and ensure proper recording; - transparent data storage, retrieval, and dissemination with disclosure of sources and methods. ### C. Promoting Official Data Integrity - Role of the Fund’s Statistics Department (STA): - help member countries provide required official data for surveillance, lending, and other core activities; - act as standard setter, provider of capacity development (CD), assessor of observance of standards and codes, and promoter of data transparency. - STA activities: - authored or co-authored virtually all statistical methodologies used around the world to compile macroeconomic and financial statistics for six decades; - provides methodological guidance that underpins a global capacity development program—targeted technical assistance and training—to sustain implementation of statistical standards. - Donor-funded CD: - growing reliance on donor partnerships to fund technical assistance and training has expanded stakeholders monitoring data integrity; - most of STA’s capacity development interventions are now funded by donor resources, making CD planning, monitoring, and evaluation more accountable, transparent, and outcomes oriented. - Data ROSCs: - STA prepares Reports on the Observance of Standards and Codes (Data ROSCs) to assess data quality across dimensions including integrity; - Data ROSCs conducted for over two decades for about 85 members (including statistically advanced countries); - Data ROSCs include surveys of public and private sector users, a published response of the authorities, and may inform Article IV Staff Report appraisals and statistical issues appendices. - Data Standards Initiatives: - e-GDDS, SDDS, and SDDS Plus encourage publication of essential data and metadata in line with pre-announced release calendars; - nearly universal participation of the Fund membership (only seven member countries—Andorra, Eritrea, Nauru, New Zealand, Somalia, South Sudan, and Turkmenistan—are outside the data dissemination initiatives, with Andorra, New Zealand and Somalia currently working with STA staff to join in the near term); - these initiatives facilitate external scrutiny by the public, market participants, and rating agencies and allow users to flag questionable trends or publication delays; - STA monitors performance under the initiatives and publishes annual monitoring reports. ### D. Monitoring Data Integrity - Routine checks and actions: - Staff routinely checks official data for possible evidence of integrity shortfalls; in rare cases, this could lead to formal sanctions against a member that has provided inaccurate data. - Country teams scrutinize official data upon receipt, including verification that members provide data required under Article VIII, Section 5—in as accurate a form as practicable. - If doubts arise about accuracy, area department staff engage authorities and can ask STA for guidance; unresolved doubts due to reasons other than capacity constraints are escalated to Management and may lead to formal proceedings and report to the Executive Board. - Such action can lead to censure or formal sanctions and can culminate in mandatory withdrawal of the member from the Fund, although such escalations are rare. - Voluntary data re-dissemination: - Data sent voluntarily to the Fund for re-dissemination (e.g., International Financial Statistics) are checked and validated; - when doubts arise, STA engages the authorities, offering technical assistance if warranted, and requests reporters to check, correct, and resubmit suspicious or incomplete values. - Given voluntary nature of reporting for re-dissemination, STA relies on informal dialogue to ensure regularity, timeliness, and methodological observance. - Assessing adequacy for surveillance: - Beyond inaccurate or late provision, country teams assess adequacy of data for surveillance purposes; - Board has required since 2004 that staff reports provide a descriptive assessment of the adequacy of official data for surveillance purposes to inform the Board of data deficiencies that might hamper analyses and erode credibility of policy advice; - STA supports preparation and updating of these assessments, contributing to the Fund-wide review process and statistical issues appendices. - Recent staff proposal: - In line with IEO recommendations, staff proposed in March 2022 a more structured and transparent assessment of data adequacy for surveillance. - The IEO’s 2016 evaluation ("Inadequate Data and Faulty Analysis") recommended more assessment of inter-sectoral consistency of macroeconomic data to reduce undetected data manipulation. ### E. Panoramic View of the Membership and Statistical Challenges - Broad effectiveness and remaining scope for improvement: - Fund’s comprehensive framework to improve statistics and safeguard data integrity has been broadly effective. - Vast majority of staff reports are based on macroeconomic and financial data that offer a strong basis for country analysis and policy advice. - Incidence of serious shortcomings: - In only slightly over 20 cases, staff have assessed official data to suffer from serious shortcomings that significantly hamper surveillance. - For at least five years there have been no breaches of obligations arising from provision of inaccurate data to the Fund for surveillance purposes—although there was a case of persistently late provision of data. - Most severe issues involve weak capacity in fragile and vulnerable countries (FCS). - Ongoing priorities: - Staff will intensify capacity development efforts tailored to FCS while continuing to support statistical improvement elsewhere. - On timeliness and periodicity, the Fund will continue to work with members to further improve the data standards initiatives, which were reviewed in February 2022. - Statistical standard setters must continually introduce improved methodologies to better reflect economic change and innovation; the next upgrade of methodologies guiding compilation of macroeconomic statistics (national accounts, balance of payments/international investment position, government finance statistics, and monetary and financial statistics) is expected to culminate in [text truncated in source]. *Source: ppea2022032 - 1. IMF Forecasts—Additional Background* ### 2025. Thus, another cycle of implementation of the latest methodologies will begin soon after, with ### ppea2022032 - 2025. Thus, another cycle of implementation of the latest methodologies will begin soon after, with ### Use of Third-Party Indicators in Staff Analysis - Fund staff use third-party indicators (TPIs) subject to the Fund’s TPI policy. - TPIs can fill gaps and enrich analysis but use must follow principles and best practices in the TPI guidance note to ensure transparency. - An internal TPI Digest documents statistical characteristics, strengths, and weaknesses of commonly used TPIs and guidance on presentation in staff reports. - Interim guidance from SPR and STA after the World Bank paused the Doing Business Report in August 2020 asked staff to cease its use in country and policy documents; with the discontinuation of the Doing Business Report in September 2021, this guidance was made permanent. ### Supporting the Integrity of Staff Analysis: Preparing Staff Reports — Main Considerations - Primary purpose of an IMF staff report: provide an expert, independent, technical analysis as the basis for Board decisions or information (para 22). - Preserving analytical integrity defined as safeguarding the quality and independence of staff analysis and views; weaknesses create reputational risks (paras 22–23). - Analytical independence occurs within defined boundaries set by legal and policy frameworks, Executive Board–approved substantive policies, and periodic Board reviews (para 23). - Key governance and practice points: - Fund policies normally reviewed every five years; reviews can be delayed (footnote 12). - Surveillance reports (Article IV) must be consistent with the 2012 Integrated Surveillance Decision (ISD); assessments required to determine whether a policy area is macrocritical as defined in ISD para 6 (para 23, footnote 13). - The 2021 Comprehensive Surveillance Review (CSR) called for systemic integration of emerging topics, including climate change, into surveillance (para 23). - Use of Fund Resources (UFR) reports must be consistent with Guidelines on Conditionality and other established policies; program context requires accurate diagnosis and ownership; authorities’ commitments are laid out in letters of intent and MEFPs, which are published with staff reports (para 23). - Flagship reports (WEO, GFSR, Fiscal Monitor) rely on aggregation of country forecasts and judgment on analytical chapter topics by authoring departments (para 23). - Capacity development (CD) topics are demand driven and guided by Board-approved criteria and funding constraints (para 23). - Considerations that shape tailored, tractable advice (para 24): - Tailored research and analysis (SIPs, analytical chapters, country authority and other organizations’ analysis). - Country, regional, global context, past Fund advice, political economy, and capacity constraints. - Best practices and peer learning. - Application of judgement within Fund policy perimeters. - Dialogue and pressure: - Continuous, robust dialogue with authorities and stakeholders helps arrive at appropriate advice; country authorities and OEDs have responsibility to provide comments in appropriate contexts (para 25). - Undue pressure can occur (implicit/explicit intimidation, lobbying, withholding information), may cause self-censorship, and can arise in surveillance, CD, or UFR contexts (paras 26–27; footnotes 14–15). - A survey in the Institutional Safeguards review found that 18 percent of Fund staff responded negatively to a question on whether their work is not unduly influenced (footnote 15). ### Macroeconomic Forecasts - Core element: production of consistent forecasts (projections) of macroeconomic variables conditional on assumptions about members’ current and announced policies (para 28). - Forecast inputs and processes: - Informed by historical data and consistency with regional and global developments and expected paths for key variables (e.g., interest rates, commodity prices) (para 28). - Methodologies vary by country and series; country teams update projections continuously and publish them in Article IV, UFR staff reports, and WEO updates (para 28). - Fund forecasts reflect bottom-up and top-down inputs; iterations between country forecasts and in-house models help converge projections reported in the WEO (para 29; Box 1). - Interdepartmental review process provides scrutiny and checks (para 29). - Risks, baseline, and communication: - Forecasts are built around a baseline scenario anchored on authorities’ established policies—UFR contexts assume full implementation of authorities’ policies (para 30). - Baseline should be complemented by qualitative and/or quantitative assessment of risks; supported by quantitative risk tools (e.g., growth-at-risk), contingency and scenario planning, and conditional policy advice (para 30; footnote 16). - Forecasts often become focal points in lending and surveillance reports (output gaps, structural fiscal balances); differences between Fund, authorities’, and consensus forecasts attract media and can pressure staff and foster self-censorship (para 31). - Box 1 (WEO and quality of IMF forecasts) — key points: - WEO uses “bottom-up” country team projections complemented by “top-down” in-house model guidance; iterations lead to convergence; semi-annual process for all countries, quarterly for a core set (Box 1). - Country teams deploy a variety of models and tools (e.g., growth at risk); internal review processes assess plausibility and consistency; WEO submission checks internal and aggregate consistency and flags major deviations (Box 1). - Evaluations: IEO and reviews assessed IMF forecasts; 2018 Review of Program Design and Conditionality found Fund programs systematically overestimated growth and recommended increased scrutiny of program baselines and better calibration of risks, downside scenarios, and contingency plans (Box 1; references to 2014 IEO evaluation and 2018 review). ### Analytical Tools - The Fund uses analytical tools drawing on official and third-party data to ground analysis, forecasts, and advice in macrocritical areas (para 32). - Examples: External Sector Assessments (ESAs, Box 2), Debt Sustainability Analysis (DSAs, Box 3), internal tools for policy consistency and forecast evaluation reports (para 32). - Methodology, guidance, and training: - Tools are based on clear methodologies that are rigorously scrutinized and often endorsed by the Board and published; guidance notes and training programs support consistent application and interpretation (para 33). - Guidance notes and training expand upon Board-endorsed policy papers or reviews (e.g., Comprehensive Surveillance Review) (para 33). - Pressure points and limitations: - Data quality issues can limit reliability of outputs; any tool that builds on a macroeconomic forecast inherits the forecast’s challenges (para 34). - Tools may not fully capture country-specific considerations; application of judgement is important but creates scope for disagreement and potential pressure to influence judgment (para 34). - Guidance notes set boundaries around judgement but do not fully resolve these challenges (para 34). *Source: INTERNATIONAL MONETARY FUND, ppea2022032.* ### Box 2. External Sector Assessments (ESAs)—Analysis and Integrity Issues ### Box 2. External Sector Assessments (ESAs)—Analysis and Integrity Issues ### Role and purpose - ESAs support a core function of the Fund, with the Articles of Agreement requiring that the Fund exercise firm surveillance over members’ exchange rate policies and, from a multilateral perspective, oversee the effective operation of the International Monetary System (IMS). - ESAs inform the Fund’s policy advice, are included in all Article IV reports and in the annual External Sector Report (ESR), and build on various data sources, tools and metrics, and staff judgment informed by country specific knowledge. - Details on the ESA methodology can be found in Annex IV. ### Coverage and judgment - ESAs should cover external sector developments with assessments in five main areas: current accounts; real exchange rates; capital flows and policy measures; foreign exchange intervention and reserve levels; and external balance sheets. - Assessments should be tailored to country circumstances and focus on the most important issues, with the depth of coverage reflecting the degree of concern. - Staff advice on the overall policy mix should fully reflect the ESA results. - Staff judgement plays a key role in selecting indicators, navigating data limitations, adjusting standard assessment methods, and interpreting results; staff should be explicit about key assumptions and acknowledge uncertainties. ### Analytical tools and methodologies - A variety of standard tools are used by staff; a core set of standard tools and associated guidance inform most ESAs. - Assessments of current accounts and real exchange rates are underpinned by the External Balance Assessment (EBA) and EBA-lite methodologies.1 - Capital account policy advice is governed by the Fund’s Institutional View on Capital Flows.2 - The Integrated Policy Framework provides a lens to evaluate policy responses to external shocks, while various Fund reserve adequacy metrics provide gauges to evaluate international reserves.3 4 - The External Sustainability Approach can help evaluate external stock positions. ### Model choice, adjustments, and transparency - Teams have discretion about which methodology anchors the overall assessment; the EBA and EBA-lite methodologies contain three and two econometric based approaches, respectively, as well as other complementary tools. - The CA model is most frequently used; regardless of which model anchors the assessment, the ESA should elaborate on the choice of model and continuity in the choice of anchor model from year to year is expected unless circumstances change. - Models often yield different results; staff judgement is needed to interpret results and, where models cannot fully capture country specifics, an additional quantitative adjustment may be made to arrive at the staff-assessed CA and REER gaps. - Any adjustors are expected to be transparently presented in the staff report along with a clear justification. ### Translation of quantitative results into qualitative assessments - Based on the staff-assessed CA and REER gaps, there are well-defined thresholds to translate staff’s quantitative model-based assessments into the overall qualitative assessment. - Deviating from this framework, while rare, is appropriate at times depending on country specific circumstances (for example, an unusually low level of reserves or other unusual yet hard-to-quantify circumstances). - When and whether to exercise this discretion can create an additional pressure point during the internal review process; deviations should be well justified and transparently presented in the ESA. - ESAs clearly state a qualitative overall assessment of the external position; the qualitative overall assessment can be a pressure point in the review process and in Board discussions given sensitivities to the overall assessment. ### Multilateral consistency and adjustments - Multilateral consistency (that the global sum of staff-adjusted CA gaps is zero) is preserved through technical adjustments as part of the ESR process, avoiding an overall bias in any direction for the ESR countries. - The consistent application of COVID adjustors across the full membership helps ensure multilateral consistency. ### Integrity risks and pressure points - ESAs are based on transparent methodologies and tools but have potential pressure points that could affect analytical integrity. - Sources of pressure include: - the choice of which model anchors the assessment and potential year-to-year changes in anchor choice; - the use and presentation of quantitative adjustors that can contribute to changes in the overall assessment; - sensitivities around the qualitative overall assessment in internal reviews and Board discussions. - The transparent and evenhanded application of judgement is supported by guidance, regular training, and the internal review process. *Source: ppea2022032 - Box 2. External Sector Assessments (ESAs)—Analysis and Integrity Issues* ### Box 4. Interdepartmental Review Process ### Box 4. Interdepartmental Review Process ### Historical evolution and major reforms - Several formal evaluations, including by the Office of Internal Audit (OIA), were conducted during the 1990s. - A taskforce produced a report entitled, “Enhancing the Effectiveness of the Review Process” (2002). - In 2004, another taskforce produced a report entitled, “Assessment of the Revised Review Procedures.” - Reforms introduced based on this work included: - tighter word limits on policy papers; - simplified response to Management comments on cleared papers; - early consultation procedures; - enhanced accountability. - A working group issued “Simplifying the Review Process” in December 2007 as part of a Fund-wide downsizing and refocusing exercise. - The current review guidelines came into effect in late 2009, with subsequent modifications particularly related to Management clearance. - As part of the revised review procedures, the Strategy, Policy and Review Department (SPR) undertook to monitor implementation on an ongoing basis to ensure quality control and to revisit the operation of the review process in light of experience. ### 2010 OIA audit findings and follow-up - In 2010, OIA conducted an audit of the interdepartmental review process. - OIA found that processes introduced in 2008 had resulted in a sharper prioritization of issues as well as countries. - OIA noted that on balance, the evidence suggests that the quality of the information and analysis about key decisions and risk management the Board receive had not been adversely affected. - Interviewees generally thought that review of large and systemically important countries (especially the G-20) was at least as intensive as before. - Neither the interviews nor the country cases suggested concrete examples of a major issue that had ‘slipped through the cracks’ as a result of the new country review procedures introduced in 2009. - Four recommendations were made in this OIA audit of 2010: - Three recommendations were directed toward FAD/MCM to redress deficiencies to make their participation in the review process more effective and impactful. - The fourth OIA recommendation encouraged SPR to ensure “best practice” was applied in flagging issues to management. - All four recommendations have been closed by OIA. ### Risks, pressures, and resource constraints identified by Risk Reports - Fund-wide Risk Reports produced by the Office of Risk Management (ORM) covered specific aspects of the review process. - Recent risk reports (2019 and 2020) identified apparent rising strains on the review process owing to greater volume and complexity of review work. - The reports noted these strains posed both policy and process risks and observed a few incidents of review inconsistencies in recent Board documents. - The flat real budget and limited flexibility in reallocating resources to meet additional demand were cited as the root causes according to the Risk Reports. - More consistent use of eReview, including by for cross-functional documents and all stages of the review process, was seen as improving transparency and monitorability. ### Use of eReview and other platforms (Box 5 highlights) - eReview is a web-based application on the Fund’s intranet to facilitate and streamline the process for reviewing Country and Policy/Admin papers at the Fund; introduced in 2009. - eReview captures important milestones of a Country or Policy/Admin document life cycle before its issuance to the Executive Board, from the first draft sent for review to the final version sent to Management. - Key features of eReview: - One eReview site per country with a shared discussion space between area and review departments and private sections for each review department. - Reviews of policy and admin papers organized around the Fund’s thematic framework using the same interface as for country papers. - Open access to staff with controlled access to confidential and strictly confidential documents through individual access rights. - Limitations and drawbacks noted: - A number of country (e.g., briefs for staff visits, FSAP reviews, most CD documents) and admin paper reviews take place outside eReview. - Some key documents are not captured by the tool—like Back-To-Office (BTO) reports and other Memos to Management. - eReview does not capture all aspects of the review processes (e.g., discussions within country teams, among reviewers and peers, and how comments were addressed—which is mostly done on email at present), requiring correspondence outside the system (email), identification of reviewers, and input/export of comments (email), and clearances (email). - Although eReview allows sending emails related to each task, such feature had very limited adoption. - Search and collaboration capabilities are limited. - Management of review assignments is manual. - Work is underway to develop a new system in the context of the Integrated Digital Workplace (IDW): - Technical support for the eReview software platform will soon expire. - The new system should introduce new functionalities, leveraging the updated platform and maintaining the positive attributes of the old system. - It is expected that the historical database, particularly of review comments, should be maintained and migrated to the new review solution. ### Interdepartmental review practices, roles, and documentation - The Fund’s main reports (e.g., Article IV consultations, UFR, flagship chapters, and policy papers) are initially circulated in draft form via eReview, where comments are compiled by department. - The final version of these reports, incorporating review comments and input from discussions with authorities (where relevant) are likewise reviewed using eReview. - Other decision-making documents (e.g., staff visit briefs, FSSAs, most memos to Management) are reviewed via email. - The relevant review departments vary based on the nature of the report: - For surveillance and lending country reports, review is primarily assigned to a specific group of FDs (i.e., SPR, FAD, FIN, MCM, LEG). - For FSSAs (authored by MCM), the relevant AD reviews and co-signs the paper. - For country CD reports, the relevant AD reviews the paper, but clearance rests with the CD providing department. - Policy papers and flagship chapters tend to be reviewed by a wider set of departments, including both ADs and FDs. - Finite resources and streamlined review policies mean not every department reviews every item assigned to them; in some cases certain departments are simply copied for information. - A small set of documents is not reviewed by departments other than the authoring department and are sent directly to Management or the Board (most Selected Issues Papers and Back-to-Office Reports). - Reviewing departments draw on a range of resources to inform their comments: - Reviewers typically ground their comments in sound macroeconomics as well as the Fund’s legal and policy requirements. - Reviewers may draw on comparable country cases to help ensure consistency and evenhandedness in Fund advice and the application of policies. - SPR can draw upon confidential internal assessments of macroeconomic vulnerabilities and governance, among others, to inform their review comments. - To check the realism of projections, an examination of how and where staff forecasts of key variables, such as growth and inflation, differ from the historical experience, is also undertaken at this stage, including by considering external information. - The review process often needs to cover not only forecasts of core indicators (such as growth and inflation), but also the path of analytical constructs such as output gaps or structural fiscal balances, or embedded analytical assumptions such as fiscal multipliers. - Different departments bring different perspectives and priorities to the interdepartmental review process. ### Policy Consultation Meetings (PCM) and follow-up - For policy notes that precede the preparation of country surveillance and program documents, a Policy Consultation Meeting (PCM) between authoring and reviewing departments is typically organized. - The PCM is chaired by the mission chief of the authoring department and aims to address the main comments raised during the review process and seek consensus among departments on: - the realism of the macroeconomic framework; - policy recommendations (and/or program design and conditionality) that will guide the team’s forthcoming discussions/negotiations with authorities. - Following internal review, policy notes are cleared by Management (node 4) and provide the basis for the elaboration of a staff report after a mission, which is then again reviewed by departments. - Practices regarding documentation of the review process vary across document types and departments: - Not all decision-making documents use the common review platform. - SPR is tasked with following up on main comments for country reports. - For flagship reports, functional departments (RES/MCM/FAD) cross-validate changes. - The process for following-up on main comments on policy papers is typically left to authoring departments’ discretion. - Different practices result in varying levels of clarity for reviewing departments and for Management on how comments have been addressed. - With a few exceptions, reviewing departments also do not have access to the primary data underpinning the analysis in the report, which limits their capacity to identify potential errors. - Tight turnaround times amid high work pressure can be a source of risks, especially for complex cases. ### Handling disagreements, SPR responsibilities, and Management clearance (Node 3) - If consensus is not reached during the interdepartmental review process, outstanding areas for concern are flagged in the cover memo to Management that accompanies the report. - The authoring departments draft the memo and note the areas of disagreement (typically identifying which department(s) they originated from), proposals to address the disagreement, and whether such proposals were sufficient to alleviate the original concerns that were raised. - In country papers, SPR’s clearance of the revised paper is required. - SPR is given a chance to comment on the cover memo, including the summary of issues discussed during the PCM as well as explanations of how other reviewing departments’ views have been addressed in the revised paper. - The SPR front office reviewer has specific responsibilities with respect to clearing country staff reports: - SPR co-signs all country reports with Area Departments. - SPR has a fiduciary responsibility to ensure the appropriate and consistent application of Fund policies. - The SPR senior reviewer’s signature on the masthead of a staff report is intended to indicate that SPR (i) has reviewed and assessed the report, and (ii) finds the report satisfactory in terms of its contents: views, analysis, conclusions and proposals, including assessments of consistency with Fund policies and comparability of treatment. - Staff reports can go to Management noting that SPR has reservations regarding specific aspects of the report. - If Management rejects these reservations and SPR continues to hold on to them, masthead signature of the staff report by SPR without any further explanation to the Board is not legally permitted unless the staff report explicitly notes the reservations of SPR. - The alternative would be to send the report to the Board without the signature of SPR. ### Management adjudication, transparency, and Board engagement (Nodes 3 and 4) - Management engagement on a staff report is sought via memorandum that identifies the nature of the engagement: - For information: no decision or feedback is requested. - For guidance/approval: a decision is requested, or Management guidance is sought on a set of options. - Management is expected to adjudicate any issues not resolved during the interdepartmental review process, in particular disagreements among staff. - Precedent suggests Management is expected to provide general guidance to staff and bring strategic considerations related to the decision at hand, including broader implications for the Fund’s agenda, reputation, and operations. - Management typically would not be expected to weigh in on technical aspects of staff’s analysis, although there could be cases where Management has its own expertise on a particular topic. - Management retains the prerogative to overrule staff recommendations, including outstanding objections from SPR on country reports. - To address instances where Management has been provided with incomplete information or did not consult all relevant parties, a clearly laid-out memorandum that identifies the sources of any disagreements among staff is essential and follow-up discussions should include all relevant parties to ensure Management has full information and to support transparency. - Expectations on what, when and how Management should weigh in could be clarified to support balancing strategic considerations, and ensuring clear communication of Management decisions, including their rationale, is important for transparency. - When Management engages directly with country authorities or discusses country cases with the relevant Executive Director, mission chiefs and/or senior staff from Area Departments should, as a general rule, participate in the discussions, which is not always the case. - Following clearance by Management, staff reports are issued to the Executive Board through the Secretary’s Department and any further modifications are governed by the Transparency Policy. - Only Management-cleared documents can be issued to the Board. - Member country authorities’ consent is not needed for circulation to the Board. - Staff’s analysis is sent to the Board for consideration or information; staff engagement with Board members can also take place ahead of a Board meeting through informal outreach or while on mission. - Fund policies aim to balance effective engagement with the Board and country authorities and preserving independent staff analysis: - Guidance notes emphasize open and candid two-way dialogue with country authorities to support traction and avoid surprises and to accurately reflect authorities’ views. - Staff reports must not be negotiated with country authorities and drafts of such reports (or portions thereof) are not to be shared with authorities, with some well-defined exceptions. - Use of “Authorities’ Views” sections in Article IV reports and BUFF statements by country authorities help separate staff’s views from those of member country authorities. ### Board dynamics, potential undue pressures, and safeguards - Executive Directors frequently play a dual role as officials of the Fund and as (optional) representatives of countries that elect them; they must be mindful of their duty to act in the interest of the Fund. - While dialogue with the Office of Executive Directors (OED) mostly finds a balance, there may be scope for OED to attempt to exercise undue influence on staff’s analysis: - Pressures may be subtle, with staff feeling incentivized to avoid rocking the boat in interactions with the Board, especially chairs representing major shareholders or influential constituencies. - Pressure can occur directly by placing pressure on staff regarding results of analysis or indirectly by having OED participation in meetings with non-government stakeholders limit the candor of such discussions. - The Fund’s culture, which favors consensus building, tends to limit staff’s capacity to resist such pressures. - Although such instances are rare, there is a need to strengthen mechanisms for staff to raise concerns about potential undue pressure on analytical integrity from OED. *Source: Box 4. Interdepartmental Review Process, DATA AND ANALYSIS INTEGRITY AT THE FUND: STOCKTAKING AND RECOMMENDATIONS.* ### Box 6). In the case of policy staff reports, in addition to the rules that apply to country papers, staff ### Box 6. The Fund’s Transparency Policy—as Applied to Country Documents ### Key principles and publication regime - A paramount principle: staff reports must not be negotiated with country authorities; the Transparency Policy supports safeguarding the independence of staff views. - Once a document has been issued to the Board, all modifications except those certified by the head(s) of the authoring department(s) as bona fide administrative errors are guided by the rules under the Transparency Policy. - The publication regime for all country documents covered by the Transparency Policy Decision is “voluntary but presumed.” - “Voluntary” means publication of country documents is subject to the concerned member’s consent. - “Presumed” means the Fund encourages each member to consent to publication of such documents by the Fund. - It is also presumed that policy papers, with few exceptions, will be published following Executive Board approval. - For country documents, the relevant Executive Director will prepare a statement on the key issues (known as the “Buff”) that can be included in the bundle with the published staff report. ### Permitted modifications to country documents - Modifications are limited to: - Corrections to the original, and thus also to the document to be published, due to typographical errors, factual errors, mischaracterization of authorities’ views, or evident ambiguity. - Corrections after the Board date are further limited to cases where the correction is brought to the attention of the Board before the conclusion of the Board’s consideration of the document, or where the failure to make the correction would undermine the overall value of the publication. - Deletions to the document to be published, but not affecting the original. - Deletions should be limited to information that is not already in the public domain that constitutes either highly market-sensitive material or premature disclosure of policy intentions. - In case of disagreement between staff and the country authorities over proposed deletions, members are entitled to have their requests considered by Management and even the Board. - Different modification rules apply to the WEO, GFSR, and FM: staff may modify the documents prior to publication in order to, inter alia, take into account views expressed at the relevant Executive Board meeting. - For policy staff reports: staff may revise a policy paper where the staff has modified its views in light of a Board discussion or following significant new developments but not after the relevant Board decision. The staff report cannot be modified to take into account the Board’s views unless the staff and Management share those views. In case of disagreement, the Board’s views are reflected in the summing up and highlighted in the final document. ### Findings on data and analysis integrity (paragraphs 60–61) - Strong frameworks and processes are in place to support data and analysis integrity at the Fund. - In surveillance and lending, staff apply quantitative tools, frameworks, and informed judgement relying on a variety of data sources to arrive at policy recommendations. - Processes and practices supporting staff’s analysis are governed by frameworks and policies that have evolved over time and are periodically reviewed. - Application is carefully examined in the interdepartmental review process, during which other departments systematically review and comment on reports. - Improvements identified: - Clarify the role of Management and terms of engagement by members of the Offices of Executive Directors (OED) with staff on staff’s conduct of analyses. - Strengthen measures to bolster staff’s voice where staff feels analysis integrity may have come under undue pressure. - Ensure evenhanded coverage across new and emerging areas based on objective and clearly communicated criteria. - Improve transparency and documentation of the internal review system and assess adaptability to the upcoming Integrated Digital Workplace (IDW). ### Recommendations (paragraphs 62–65) - 62. Clarify the terms of engagement of OEDs with staff in staff’s conduct of analysis. - Rationale: Executive Directors frequently play a dual role as officers of the institution and as representatives of country authorities; formalizing good practices can level the playing field, set expectations and strengthen analysis integrity. - Practices should cover engagement with the mission chief, Senior Country Reviewer and Department Director, as well as Fund Management; ensure candid discussions with non-government stakeholders; guide sharing of material for fact-checking and confirming authorities’ views. - The Code of Conduct for Members of the Executive Board should outline an effective mechanism for staff to raise concerns about potential undue pressure from OED/country authorities. - On-boarding program: propose a more regular, well-structured, and much expanded on-boarding program for OED staff. - Proposal(s): (i) Engage with the Board to clarify and formalize the terms of engagement with staff; (ii) Strengthen the effectiveness of mechanisms for staff to raise concerns about undue influence (in coordination with WGIGSV). - Input from OMD, LEG, SEC, and ADs/SPR. - Impact on Analytical Integrity: High - Estimated Cost: Medium - Footnote: This recommendation would have resource implications, particularly for SEC. - 63. Clarify the role of Management in the clearance of staff papers and positions. - Rationale: Managing Director’s dual role as head of staff and Chairperson of the Executive Board; codifying best practices and enhancing transparency can strengthen analytical integrity. - Specifics: clarify principles on when and how Management would weigh in on policy messages (e.g., at policy note or staff report stage); document and explain decisions; formalize practice of including mission chiefs in discussions of country matters with OED/country authorities. - Draft guidelines for cover memos on purpose, content, and format to ensure Management has sufficient information. - When important decisions are reached during meetings with Management, prepare and circulate a short write-up of the discussion that spells out clearly the rationale for the decision. - Proposal(s): Codify and document best practices and enhance transparency around clearance of policy notes and staff reports. - Input from OMD, LEG, ADs, and SPR. - Impact on Analytical Integrity: High - Estimated Cost: Low - 64. Complete ongoing work to help ensure evenhanded coverage of emerging areas in surveillance. - Context: Fund is gradually building expertise in new areas such as climate change, gender, and digital money amid limited resources. - Actions: formulate and communicate principles for an evenhanded rollout of Fund coverage of emerging areas, based on the principle of macrocriticality. - Principles could be based on risk-adjusted and input-based evenhandedness (2014 TSR) and follow experience integrating governance issues. - Proposal(s): Draft guidelines for coverage of emerging areas. Led by SPR with respective groups and reflected in the guidance notes. - Impact on Analytical Integrity: Medium - Estimated Cost: Medium - 65. Further strengthen the transparency and documentation of the internal review process, and assess adaptation to the Integrated Digital Workplace (IDW). - Actions: - Ensure all documents that go through interdepartmental reviews use the eReview system, including operational decisions currently not subject to the formal review process. - All authoring departments should provide reviewing departments and Management with a table detailing how main comments were addressed. - Encourage sharing of data and codes with select reviewing departments for analytical content. - In implementing IDW, ensure the replacement for the existing eReview system can capture important side discussions (currently via email) and decisions reached in meetings with Management, while not inhibiting candid discussions or generating undue burdens. - Office of Internal Audit (OIA) to assess how the internal review process has adapted to IDW following implementation; OIA should conduct a benchmarking exercise with other institutions over the course FY23 to lay the groundwork for such an audit. - Proposal(s): (i) Guidelines to be drafted by SPR, in consultation with other departments, for endorsement by OMD; (ii) Audit (by OIA) on how the internal review process has adapted to the implementation of IDW. - Impact on Analytical Integrity: Low - Estimated Cost: Medium *Source: ppea2022032 - Box 6).* ### Annex II. The Debt Sustainability Framework for Low-Income ### Annex II. The Debt Sustainability Framework for Low-Income Countries ### Overview - The LIC DSF conducts debt sustainability analysis in a standardized manner using data inputs to automatically produce required tables and charts. - The framework is set up to conduct both external and public DSAs based on 20-year macroeconomic projections and borrowing strategy. - Relevant debt-related indicators are calculated under the baseline and stress tests, which are compared with thresholds to determine a risk rating. - The template has been streamlined to be more user-friendly, prediction power improved, and additional analytical tools added to incentivize teams’ enhanced engagement with the authorities and discussion of realism of baseline projections. - Only first 10 years inform the mechanical risk rating. ### Data inputs and core analytical tools - Required data inputs include: - basic country data (e.g., commodity exporter, frontier market, small state, financing sources/terms, access to international capital markets etc.) - debt coverage - key macroeconomic/debt data and assumptions (key indicators: real economic growth, inflation (GDP deflator), the primary balance, the current account balance, exports/imports growth, FDI and remittances) - assumptions on financing terms for external and domestic debt (interest rate, grace period, maturity) - standardized and tailored stress tests data - One input sheet is compatible with DMX, where most relevant macro and debt information can be downloaded and are already linked to other working sheets. - Additional analytical tools, including four realism tools, are linked to standard inputs and usually do not require additional information from users. ### Coverage and debt definitions - The coverage of public and publicly guaranteed (PPG) debt should be as broad as possible to arrive at an assessment comparable across countries and discussed in the DSA write-up. - Coverage should account for all relevant public sub-sectors including SOEs that pose fiscal risks. - Data on contingent liabilities should be reported to capture potential fiscal risks not already in the PPG perimeter. These may include the expected costs of bank recapitalization, contingent liabilities associated with SOEs, PPPs, financial market vulnerabilities, disputed claims, or unfunded pension liabilities. - PPG debt should be stated in gross terms although significant government liquid assets could be used in the application of judgment for the final rating. - Default definition of external debt in the LIC DSF is on a residency basis (domestic debt held by nonresidents is treated as “external debt” regardless of currency). Users have sometimes used domestically-issued or domestic-currency debt as a proxy for domestic debt due to tracking difficulties and limited non-resident participation in LIC domestic markets. - External debt usually meant foreign-currency denominated external debt held by non-residents. ### Realism tools and their role - Users are expected to assess and report results of four realism tools that scrutinize baseline macroeconomic and debt projections: - (i) drivers of debt dynamics - (ii) fiscal adjustment in primary balance - (iii) fiscal adjustment and possible growth paths - (iv) public investment and economic growth - Purposes of realism tools: - Provide comparisons using country history, cross-country experience, or simple economic relationships. - Flag situations where drivers deviate markedly from experience (optimistic or pessimistic). - Encourage users to reassess and, where warranted, revise macro numbers and financing assumptions when realism tools flag inconsistencies, unless deviations are explained in the DSA writeup. - The realism tools help minimize biases in projections but are not prescriptive. ### Composite Indicator (CI) and thresholds - Debt burden indicator thresholds for PPG external debt and benchmark for total public debt-to-GDP are determined based on a country’s debt carrying capacity. - Countries’ classification into weak, medium, strong carrying capacity is based on a Composite Indicator (CI). - The CI is generated as a weighted sum of country-specific and global factors: World Bank CPIA score, the country’s real growth, international reserves, remittances, world growth. - The CI uses ten-year averages of the variables (five years of history and five years of projections) to ensure stability and smooth cyclical impact; history and projections balance past performance with expected persistent changes. ### Stress tests and shock sizing - The LIC DSF automatically applies a series of stress tests to gauge impact of temporary shocks on baseline debt burden indicators. - Stress test battery includes: - standardized stress tests (real GDP growth, exports growth, primary balance, exchange rate, etc.) that apply to all countries - tailored stress tests that capture country-specific vulnerabilities (volatility of commodity prices, natural disasters, market financing) - a contingent liability stress test to capture risks from public sector portions not in the debt definition - fully customized scenarios are optional for idiosyncratic risks - Size of shocks for standard stress tests is generally the smallest between the baseline minus one standard deviation or historical (ten years) average minus one standard deviation. ### Mechanical risk rating and indicators - A mechanical risk rating is produced based on debt burden indicator ratios and their corresponding thresholds and benchmark for both external PPG debt and total PPG debt. - Template outputs for relevant PPG external debt burden indicator ratios: - PV of external debt/GDP - PV of external debt/exports - debt service/revenue - debt service/exports - PV of total public debt/GDP ratio - These debt indicators are assessed against their thresholds under the baseline and the most extreme stress test scenario to derive mechanical risk signals (low, moderate, high, in distress). ### Final assessment, granularity, and judgment - Final assessment on the risk of external debt distress and overall risk of debt distress combines mechanical signals with judgment based on country knowledge. - The external debt distress risk rating remains the primary DSF output; the overall risk rating is supplementary. - For countries at moderate or high risk/in debt distress, additional granularity: - Moderate risk: characterize robustness by available “space” to absorb shocks without downgrade—labels: “limited space to absorb shocks”, “some space to absorb shocks”, or “substantial space to absorb shocks”, based on extent baseline indicators fall below thresholds. - High risk or in debt distress: users characterize public debt as sustainable or unsustainable, considering size and length of threshold breaches and likelihood of meeting current and future obligations. - Judgment may consider factors not taken into account in the DSA (e.g., size and length of breaches of thresholds, government liquid assets). ### LIC DSA workflow (steps) - The LIC DSF workflow steps produced by the template: 1. Input data on key country characteristics and country background (e.g., commodity exporter, frontier market, small state, financing sources/terms, access to international capital markets etc.) 2. Input data from the macroframework for the baseline macroeconomic projections (key indicators: real economic growth, inflation (GDP deflator), the primary balance, the current account balance, exports/imports growth, FDI and remittances) and financing mix 3. Scrutinize, for consistency and realism, the baseline projections using four realism tools ((i) Drivers of debt dynamics, (ii) Size of fiscal adjustment, (iii) the impact of fiscal adjustments on growth, and (iv) the impact of investment scaling-up on growth) 4. Generate the Composite Indicator (based on country-specific CPIA, real GDP growth, international reserves, remittances, world economic growth) to get the indicative thresholds that apply for the country 5. Perform standard stress tests and tailored stress tests appropriate to capture country-specific vulnerabilities 6. Analyze outputs and derive the mechanical signals (i.e., breaches of the thresholds) for the risk of external debt distress (including "space to absorb shocks" for a moderate risk country) 7. Analyze outputs and derive the mechanical signals (i.e., breaches of the threshold) for the overall risk of public debt distress 8. Understand the market-financing pressures tool (for countries vulnerable to market financing, relevant if they have access to international capital market) 9. Apply judgement by including country-specific factors that have not been taken into account in the DSA (e.g., size and length of breaches of thresholds, government liquid assets) 10. Determine the final risk rating, accounting for elements from judgement. Provide any applicable information that would provide granularity to the final risk rating. *Source: Annex II. The Debt Sustainability Framework for Low-Income Countries* ### 2020. To avoid these dynamics from triggering excessive and unwarranted realism corrections, the ### Annex IV. External Sector Assessment: Analytical Tools ### EBA and EBA-lite frameworks - The Fund’s framework for ESAs is anchored by the EBA and EBA-lite methodologies. - The EBA methodology: - Covers 52 advanced and emerging market economies. - Launched in 2012 and updated periodically, with refinements currently underway. - Contains three empirical models: a current account model and two real effective exchange rate (REER) models (a level REER and an REER index model). - Technical details published as an IMF working paper. - The EBA-lite methodology: - Developed in 2015 to extend EBA to the rest of the membership and updated in 2018. - Contains two empirical models: a current account model and an REER index model. - When a member is included in the EBA sample, staff are expected to use the EBA model in the ESA; staff cannot choose between EBA and EBA-lite results. ### Data, transparency, and model inputs - Econometric model results for EBA models are publicly available; EBA data and sources are detailed on the IMF’s website and data and codes used for estimation are provided for public use. - Preliminary EBA and EBA-lite results are disseminated internally following updated input data from the April and October WEO. - Additional revisions to model inputs are made to ensure consistency with the macroframework in the staff report and evolving policy advice. - SPR maintains a central repository of EBA-lite templates that generated results presented in SRs collected after members’ Board meetings but lacks visibility of changes made by country desks to the template and results between WEO updates and final assessments. - The optimal policy settings for seven key macroeconomic variables are collected once a year from area country teams through a centralized process; this is complemented by annual training. For ESR countries the optimal policy settings are published in the ESR report. ### Normative approach, policy settings, and visibility - The EBA and EBA-lite methodologies take a normative approach to estimate the current account (and REER) consistent with economic fundamentals and desirable policies. - Assessments require staff estimates of optimal policy settings for seven key macroeconomic variables; clear guidelines exist for estimating these settings. - Policy settings can be updated as policy advice evolves, but they are not typically included in the policy note or draft staff report, limiting reviewers’ visibility of year-to-year changes. ### Use of adjustors, judgement, and review pressures - EBA and EBA-lite empirical models cannot fully capture all country specifics or shocks; staff have discretion to adjust model results transparently to arrive at quantitative assessments. - Appropriate adjustments include temporary disruption of exports or imports, data discrepancies, or use of adjustors for 2020 and 2021 assessments during the COVID-19 pandemic (with guidance from RES and SPR on allowable adjustments and methods to quantify adjustors). - Use of adjustors: - Can be a pressure point in reviews and with the Board because they involve judgment and can change the overall assessment. - Reviewers are expected to ensure adjustors are well-justified, appropriately quantified, and transparently described in the ESA. - There have been cases where adjustors were not in line with guidance, either not transparently presented in draft Staff Reports or not picked up during review. - Staff mitigation includes internal training and regular seminars for reviewers. ### Additional models and external sustainability approaches - Beyond CA and REER models, additional standard models can anchor assessments: - EBA-lite includes two models for commodity exporters: - A permanent income hypothesis construct generating a norm based on inter-generational equity. - A model optimizing consumption-investment tradeoffs for commodity producers with large investment needs; several underlying assumptions are required and staff have updated guidance on assumptions and their description in staff reports. - External sustainability approach: - Seeks to determine the current account that would stabilize net foreign assets over the medium-term at a benchmark level (for EBA countries) or in net present value terms (for EBA-lite countries). - Complements other approaches by focusing on sustainability considerations. ### Reserve adequacy metrics - Assessing reserve adequacy is a critical part of the Fund’s surveillance mandate; reserves are a critical external buffer to reduce the likelihood of balance-of-payment crises and preserve economic and financial stability. - The Fund’s reserve adequacy metric for EMs: - Is an additional tool to inform comparable assessment across membership while balancing simplicity and completeness. - Methodology and guidance on use are published; the metric is updated regularly and publicly available. - Staff are expected to report this metric in staff reports for countries where it is available. - Guidance Note on ARA emphasizes attention to country-specific vulnerabilities: - The ARA metric can be adjusted to account for country-specific characteristics, which should be transparently explained in the Staff Report. - It is expected that the unadjusted metric also be reported. *Source: Annex IV and Annex V content excerpt from the provided IMF chapter.* ### Annex V. WGDAI: Terms of Reference and Procedures ### Mandate and objectives - The Working Group on Data and Analysis Integrity (WGDAI) will engage relevant stakeholders to examine roles and responsibilities at key steps of the process in handling data and undertaking and disseminating technical analysis at the Fund. - Based on the examination, the group may identify and recommend actions to ensure the integrity of data and analysis at the Fund. ### Background and motivation - Triggered by questions arising in the wake of the World Bank’s investigation into its Doing Business report about whether the Fund’s existing institutional safeguards remain fit for purpose. - A stock-take of existing safeguards is timely to ensure transparency and clarify roles of Management, Staff, and the Board in ensuring integrity of data and technical analysis. ### Institutional frameworks on data and analysis - IMF data are mainly supplied by national authorities. - Three pillars supporting data integrity: - Methodological guidance, technical assistance, and training delivered by IMF staff. - Monitoring that member countries provide essential data as accurate as practicable; country teams must include in staff reports their assessment of data adequacy for surveillance and initiate procedures when doubts arise. - Transparency policies that support integrity by publishing staff reports for public scrutiny. - The Fund also fosters data transparency by: - Encouraging observance of data integrity in compilation of official statistics (including Reports on the Observance of Standards and Codes). - Promoting Data Dissemination Initiatives (e-GDDS, SDDS, SDDS Plus) for disciplined publication of data by countries. ### Role of staff products and review process - Key Fund products using data and technical analysis: World Economic Outlook, Global Financial Stability Report, Fiscal Monitor, External Sector Report (ESR), country-specific staff reports (Article IV) and use of Fund resources (UFR), and staff reports on Fund policies. - Many products undergo comprehensive internal review; some parts have additional procedures (e.g., DSAs for low-income countries produced jointly with the World Bank). - After near-finalization at staff level, documents are sent to Management for approval with a record of interdepartmental review comments; Management may seek changes/clarifications and final Management clearance is required before issuing to the Executive Board. - Throughout this process, staff and Management are prohibited from sharing documents with national authorities or their representatives at the Executive Board to ensure analytical integrity. - After issuance to the Board, changes follow the Fund’s transparency policy specifying conditions and transparency mechanisms. ### Expected outputs and liaison - WGDAI will consult area and functional departments and the Board’s ad hoc Steering Group to: - Take stock of the current framework for data and analysis integrity. - Ascertain whether changes to processes and procedures governing data integrity are warranted. - Ascertain need for further clarification on roles/responsibilities at key nodes (clearance by authoring department; interdepartmental clearance; Management clearance; Board engagement). - Recommend specific actions arising from the above. - WGDAI will liaise closely with the Working Group on Internal Governance and Staff Voice on implications for dispute resolution mechanisms. - The findings will inform the Steering Group’s report to the Executive Board by the 2022 Spring Meetings and WGDAI will consult with the Steering Committee of the Board. ### Membership, secretariat, and resources - WGDAI members: - Louis Marc Ducharme - Ceyla Pazarbasioglu - Rhoda Weeks-Brown - Request for four staff to support the WGDAI as its secretariat. ### WGDAI process: consultations, focus groups, and outreach - Secretariat organized staff focus group discussions, prepared a draft report, and engaged in extensive internal consultations before finalizing the report. - Focus groups: - Held in December 2021. - Discussed four transition points where integrity could come under pressure: (i) authoring department, (ii) internal review process, (iii) Management clearance, (iv) interactions with the Board and authorities. - Participants were nominated by five Area Departments and six Functional Departments; a Management Advisor from OMD participated. Participants attended in personal capacity, with confidentiality assured; discussions were moderated by the WGDAI secretariat without WGDAI Principals present. - Outreach and review: - Early draft shared for comments with several IMF departments, including departments represented by WGDAI principals (LEG, SPR, STA); Heads of Area Departments and some Functional Departments were also invited to comment. - Draft was shared with the Staff Association Committee (SAC) for comments. - A staff townhall on February 15, 2022, covered the Ongoing Review of Institutional Safeguards and included Chairs of three related work streams (WGDAI, Executive Board Steering Group on Institutional Safeguards, Working Group on Internal Governance and Staff Voice). - Office hours with WGDAI members for confidential staff input were held in March. - The draft WGDAI report was circulated for internal review via eReview on February 24, 2022; comments were incorporated into the final report and a document outlining how departmental comments were incorporated was shared and posted on eReview. - The draft was shared with the IEO; the report incorporating departmental comments was shared with Fund Management, the Executive Board Steering Group (SG), and the External Expert Panel; comments informed the final report. - Informal discussions were held with other international financial institutions to discuss best practices in preserving data and analytical integrity; a brief note outlining the IMF’s framework was shared confidentially and informed staff thinking. *Source: Annex IV and Annex V content excerpt from the provided IMF chapter.* ### EXECUTIVE SUMMARY ### EXECUTIVE SUMMARY ### Purpose and scope - The International Monetary Fund (The “Fund”) tasked an independent panel of experts (The “Panel”) to benchmark and evaluate its dispute resolution system (DRS), and to make recommendations for improvement. - The Panel was appointed in January 2022 and began work in mid-January 2022, with the report submitted to the IMF’s Executive Board in mid-May 2022. - The Panel consists of Susan Raines, Olufemi Elias and Jens Weidmann (Chair). Ruben Lamdany supported the work of the Panel as Advisor, while Chioma Onwuamaegbu and Shéhan de Sayrah served as the Panel‘s Secretariat. - Date on Executive Summary: June 9, 2022. ### Overview of the Fund’s DRS (structure and relevant instruments) - The DRS was created pursuant to Rule N-15 of the Fund’s Rules and Regulations, and is set out in GAO 11, Chapter 11.03 of the Staff Handbook and on the DRS intranet page. - Components of the DRS include: - Informal services: Ombudsperson, Mediator, Peers for a Respectful Workplace (PRW). - Formal services: two-tier administrative review (Human Resources Department (HRD)), the Grievance Committee, and the Administrative Tribunal. Contractual employees may request arbitration as a final step after administrative review. - Ethics and integrity services: Ethics Office and the Office of Internal Investigations (“OII”). - A framework applying to the Managing Director and the Executive Board of Directors. ### Key findings and observations - The Fund has multiple complementary channels and appropriate policies, ranging from informal to formal processes, but important issues inhibit smooth and effective functioning of the DRS. - Some elements of the current DRS and the ethics framework "have not served the Fund well, in terms of its internal disputes and external reputation." - Cultural and behavioral factors: - The Fund is a multicultural institution with differing approaches to expressions of concern and disagreements, which may partially explain reluctance to use the DRS. - The Panel notes that many staff members are reluctant to complain or raise legitimate issues because they fear retaliation. - The Panel considers prevention the best remedy: - Staff should have full knowledge of rules and policies that apply to them. - Greater transparency with respect to cases filed, findings and disciplinary sanctions (balanced with need to protect confidential information) will increase trust and accountability. - Process and timeliness issues: - The Panel recommends expedited handling of cases, strict adherence to deadlines at all stages, and an overhaul of the Grievance Committee process to speed up the administration of justice within the Fund. - Resourcing and organizational issues: - Creation of new functions in HRD to help with early conflict resolution and to support staff more broadly is recommended. - Provision of lawyers to represent the interests of staff in the formal stages of the DRS is recommended. - Organizational changes are recommended, including a different composition of the Executive Board’s Ethics Committee to ensure impartial handling of conflicts related to the Executive Board and Management. - Expected outcome of implementing recommendations: - The Panel anticipates a reduction in the overall number of cases filed, with greater focus on informal resolution leading to earlier dispute resolution and fewer resources expended. ### Recommendations (high-level) - Focus on prevention, earlier and less formal resolution, transparency, timeliness, and strengthened resourcing for DRS functions. - Top-down change: the Executive Board and Senior Management must give a clear message that fair and early resolution of conflicts is an absolute priority and that DRS functions must be adequately resourced. - Full list of the Panel’s recommendations provided in Chapter VI of the report (this Executive Summary references the detailed recommendations in the main report). ### Evidence base and conduct of the review - The Panel’s work included: - Review of previous appraisals of the DRS. - Benchmarking against other international financial institutions and international organizations. - A Pulse Survey to understand staff perceptions and experience. - Interviews and communications with a range of stakeholders, including leaders and users of the DRS. - Examination of outcomes of administrative reviews and OII enquiries; review of policies, procedures, annual reports, Grievance Committee recommendation reports, and Administrative Tribunal judgments. - Pulse Survey participation and historical survey context: - 2012 Fund-wide survey: 660 staff responded, amounting to about 20% of all employees. - 2022 Pulse Survey: 1,599 participants responded (almost 40% of all employees). - The 2012 survey showed that slightly less than half the respondents lacked confidence in the DRS and feared retaliation; the Panel notes many of the issues identified in 2012 also appear in the 2022 Pulse Survey. ### Prior reviews and outstanding issues - 2001 Review: - Concluded the DRS was fundamentally sound and compared favorably with other international organizations but recommended changes in ten categories including information and communication, dispute prevention, roles of Ombudsperson and Ethics Officer, scope of grievable decisions, standards and process of review, Grievance Committee and Administrative Tribunal operations, and arbitration procedures for contractual employees. - The Fund approved nearly all recommendations and instituted a Management Action Plan in 2002. - 2013 Review (Office of Internal Audit and Inspection (OIA)): - Conducted after a 2012 staff survey; reviewed implementation status of 2001 recommendations. - Found that, as of December 2012, two-thirds of the Management Action Plan had been implemented; one-third was either not implemented or in process. - Noted DRS was well constructed and balanced between informal and formal mechanisms but staff survey results indicated trust and fear-of-retaliation issues. - Made seven medium-impact recommendations and two low-impact recommendations. The seven medium-impact recommendations were: - Recommendation 1: HRD should develop and implement a communications strategy to change perceptions of the DRS and not just to raise awareness; - Recommendation 2: HRD should formulate and implement an action plan to address fear of reprisal, taking into consideration suggestions offered by the subject-matter experts and best practices at comparator institutions; - Recommendation 3: HRD should issue reports regularly on status and outcomes of administrative reviews conducted in departments and HRD, and include this reporting requirement in GAO No. 31; - Recommendation 4: HRD should develop and implement an oversight and accountability framework for the Fund’s dispute resolution system. The framework should include evaluation and oversight components; - Recommendation 5: To improve the conduct of Administrative Review, HRD should (a) develop an explicit procedural guideline (for greater clarity) for Administrative Review; the guideline should be shared with departments for their conduct of Administrative Review; the guidelines should be made available to staff; and (b) notify staff that the services of the Office of Mediation is always open to them at any stage of the dispute resolution system and that the staff member is entitled to proceed to the Grievance Committee if HRD cannot adhere to the prescribed 45-day time limit; - Recommendation 6: To streamline the operations of the Grievance Committee and to expedite the process, HRD and LEG, in consultation with Staff Association Committee (SAC), should work with the Grievance Committee Chair to document rules of procedure and include provisions to expedite proceedings, and the rules should be made available to staff; and - Recommendation 7: HRD and LEG should formalize an arrangement to allow the Grievance Committee to present its views to the MD when HRD and LEG advise the Managing Director to deviate from the Committee’s recommendation. - Implementation notes: - Recommendation 2 (fear of retaliation) was partially addressed with the amendment of the Fund’s Retaliation Policy in 2019. - Recommendation 3 was implemented with issuance of annual reports on requests for administrative review since 2013, but no reporting has been issued to date for the 2019–2021 calendar years; HRD does not expect to have capacity to publish these reports. ### Panel’s procedural and analytical approach - The Panel assessed persistence of issues by reviewing prior evaluations and the extent of implementation of previous recommendations. - The Panel benchmarked against comparator institutions and best practices, reviewed documentation and outcomes from DRS-related offices, deployed a Pulse Survey, and engaged stakeholders to form a comprehensive evidence base. *External Panel of Experts’ Review of the IMF’s Dispute Resolution System — Executive Summary* ### Chapter 11.03 of the Staff Handbook. ### Chapter 11.03 of the Staff Handbook ### Benchmarking Against Other IFIs and International Organizations - Organizations benchmarked: the Asian Development Bank, the Bank for International Settlements, the Deutsche Bundesbank, the European Bank for Reconstruction and Development, the European Central Bank, the European Investment Bank, the Inter-American Development Bank, the International Labor Organization, the Organization for Economic Co-operation and Development, the United Nations, the World Bank and the World Health Organization. - Engagement methods: interviews, questionnaires, and meetings with approximately 30 officials and leaders from benchmarked organizations. - Key comparative observations: - Two organizations had stricter rules for the heads of their organization and the Executive Board Members than those applicable to staff members. - All IFIs benchmarked have a Board Audit Committee, to which their internal audit office reports. - One organization’s Board Ethics Committee is composed of former Governors and has an external secretariat; the Committee can act on its own initiative and proactively launch investigations. - Seven organizations take a proactive approach to retaliation and proactively offer interim measures where appropriate once the complaint is known, even without a request from the complainant and before a preliminary assessment is completed. - Five organizations highlighted a proactive, fundamental and solution-oriented role for their HR offices in conflict prevention, conflict management and informal conflict resolution. - One organization highlighted a proactive role for its legal office at the administrative review stage in making every effort to resolve issues and avoid escalation. - Four organizations have Employee Relations teams split into units: one dealing with administrative reviews and another focusing on informal resolution; two other organizations are considering establishing Employee Relations offices. - Three organizations have staff legal advisers who represent and assist staff through the dispute resolution process; two other organizations are considering establishing similar offices. - Two organizations provide the administrative review response to staff within 20 days of the complaint being lodged; two others provide it within 30 days. - One organization has an online intranet tracking tool accessible only to staff involved in a case for live updates. - One organization provides a toolkit for self-represented staff to guide them through the dispute resolution system. - Most organizations publish and share annual reports on case outcomes/statistics for both informal and formal dispute resolution mechanisms, and for their Executive Board’s Ethics Committee. - All IFIs benchmarked confirmed that heads of their “DRS” offices can report to the Executive Board and the head of the organization on cases, activities, and systemic issues at least once a year. - All IFIs benchmarked do not distinguish contractual status for staff working in “DRS” offices; such staff are not considered ancillary and functions are seen as permanent. ### Pulse Survey (February 2022) - Purpose: gain staff perceptions of the Fund’s dispute resolution system. - Responses: - Total responses received: 1599 (almost 40% of total staff). - Completed in full: 1393. - Partially completed: 206. - Response rates by department (Table 1): - Functional: Total Staff 2096; Survey Respondents 785; Response Rate in percent 37 - Area: Total Staff 1007; Survey Respondents 414; Response Rate in percent 41 - Support: Total Staff 842; Survey Respondents 353; Response Rate in percent 42 - Executive Board: Total Staff 155; Survey Respondents 32; Response Rate in percent 21 - Independent Office: Total Staff 47; Survey Respondents 15; Response Rate in percent 32 - All Staff: Total Staff 4147; Survey Respondents 1599; Response Rate in percent 39 - Respondents by grade (Table 2): - Executive Directors/Alternates, Sr. Advisor/Advisor: Total Staff 98; Survey Respondents 20; Response Rate In percent 20 - MD, FDMD, DMDs, B4-B5: Total Staff 82; Survey Respondents 54; Response Rate In percent 66 - B1-B3: Total Staff 265; Survey Respondents 143; Response Rate In percent 54 - A14/A15 Titled Managers (DDC/UC): Total Staff 317; Survey Respondents 162; Response Rate In percent 51 - A1-A8: Total Staff 448; Survey Respondents 187; Response Rate In percent 42 - A9 – A14/A15 Individuals Contributions: Total Staff 1837; Survey Respondents 749; Response Rate In percent 41 - Contractual/A9-A14/A14 Individual Contributors: Total Staff 662; Survey Respondents 164; Response Rate In percent 25 - Contractual A1 – A8: Total Staff 438; Survey Respondents 120; Response Rate In percent 27 - All Staff: Total Staff 4147; Survey Respondents 1599; Response Rate In percent 39 - Selected survey question responses (Table 3) (in percent): - I can report unethical behavior without fear of reprisal. — Unfavorable 32; Neutral 22; Favorable 47 - I would feel comfortable approaching management above me about my dispute, without fear of retaliation. — Unfavorable 31; Neutral 21; Favorable 48 - Management above me responds to my ideas, problems, and complaints — Unfavorable 18; Neutral 24; Favorable 58 - When it comes to being candid, I feel comfortable ‘speaking truth to power’ at the Fund — Unfavorable 38; Neutral 23; Favorable 39 - I feel like I can express dissenting views on different topics to my manager, without fear of retaliation — Unfavorable 22; Neutral 19; Favorable 60 - In my opinion, my work is not unduly influenced (i.e., undermining analytical integrity) prior to finalization. — Unfavorable 18; Neutral 0; Favorable 82 - I feel that the rules governing the conduct of management are as strict or more strict than those applicable to staff. — Unfavorable 46; Neutral 33; Favorable 20 - Management and Executive Directors lead by example in promoting ethical behavior — Unfavorable 36; Neutral 32; Favorable 32 - Management and Executive Directors lead by example in promoting fair and respectful treatment of staff — Unfavorable 29; Neutral 32; Favorable 39 - Management and Executive Directors lead by example in promoting a culture of openness and integrity — Unfavorable 33; Neutral 31; Favorable 36 - I am aware of the avenues for reporting disputes at the Fund — Unfavorable 10; Neutral 12; Favorable 78 - I am confident that the avenues of dispute resolution at the Fund are effective at handling employees’ dispute — Unfavorable 29; Neutral 35; Favorable 36 - I feel the institution provides a thorough response in addressing disputes and ethical concerns — Unfavorable 27; Neutral 34; Favorable 38 - Aggregate interpretations: - The results show that approximately a third of respondents fear retaliation and do not trust the system established to resolve disputes. - Almost two-fifths of respondents did not feel that Management leads from the top and is held to a lower standard of accountability. ### Bullying, Discrimination, and Sexual Harassment Results (Table 4) - Survey responses (in percent): - In the past 5 years, I have observed: Bullying/Intimidation — Yes 38; No 62 - In the past 5 years, I have observed: Discrimination — Yes 30; No 70 - In the past 5 years, I have observed: Sexual Harassment — Yes 5; No 95 - In the past 5 years, I have experienced: Bullying/Intimidation — Yes 21; No 79 - In the past 5 years, I have experienced: Discrimination — Yes 26; No 74 - In the past 5 years, I have experienced: Sexual Harassment — Yes 3; No 97 - In instances where the response was YES for any of the above questions, what proportion of staff reported the incident? — 31; 69 - In the instances the incident was reported, what proportion of staff were satisfied with the outcome? — 26; 74 - Interpretations: - Only a third of respondents reported incidents of bullying/intimidation, discrimination, and sexual harassment. - Approximately three quarters of those who reported were not satisfied with the Fund’s handling of the issues. - Reasons for non-reporting included belief that appropriate corrective action would not be taken, concern that the situation would not be resolved fairly or impartially, and fear of retaliation, particularly from managers. ### Engagement with Stakeholders - Interviews and meetings: - The Panel interviewed 25 current and former employees across grade ranges and contractual status, almost all of whom used the DRS within the last five years. - Stakeholders met included: The IMF Executive Board’s Steering Group on Institutional Safeguards; Members of the Staff Association Committee (SAC); The Staff Association’s Lawyer; The Ombudsperson; The Mediator; The Ethics Advisor; The Head of the Office of Internal Investigations (OII); The Director of HRD and HRD staff; The General Counsel and Director of LEG and relevant LEG staff; The Executive Board’s Ethics Committee; The Deputy Managing Director responsible for HRD; The Director of the Independent Evaluation Office (IEO); The Director of the Office of Budget and Planning (OBP) and staff; The current Chair of the Grievance Committee; The outgoing Chair of the Grievance Committee; The Registrar of the Administrative Tribunal; The former Head of the Office of Innovation and Change and staff; The Diversity and Inclusion Advisor and staff; External lawyers who represented clients in the DRS. - Confidential outreach: - The Panel provided confidential and external email access to all Fund employees and encouraged confidential messages; many responses and confidential meetings occurred; identities were withheld. - Consideration of selection bias: - The Panel was mindful of selection bias and noted consistency in views across stakeholders, aligning with Pulse Survey results. - Usage context: over the last five years from January 2017 to April 2022, there have been 9 Administrative Tribunal cases and 20 Grievance Committee cases. - Stakeholder-reported themes and concerns: - Virtually all persons who communicated with the Panel stated that the Fund’s culture did not encourage employees to “speak up” and perceived that hierarchy is particularly important. - All persons who communicated and had used the DRS complained they had suffered retaliation, felt inadequately protected, and perceived lack of accountability for those responsible for retaliation. - Perceptions of inadequate resources in OII and difficulty in meeting deadlines noted in the 2013 external assessment remain problematic; investigations can take well over 100 days. - Many stakeholders commented on lengthy formal DRS processes, sometimes taking years, with parties sometimes having left the Fund before resolution. - Stakeholders highlighted inequality of arms between complainants and the Fund, high personal and financial costs for complainants, and perception that lengthy processes and system structure discourage complaints. - Stakeholders called for more informal resolution and criticized the Fund’s adversarial posture in formal processes and insufficient attention to early resolution and settlement. - Some stakeholders alleged HRD refused to disclose requested documents during administrative review, prolonging litigation. - Complaints about lack of access to the DRS for employees in the Office of the Executive Directors and contractual staff. - Several employees raised concerns about inadequate or unclear safeguards for issues of undue influence or alleged violations of data integrity; of the 16 retaliation inquiries conducted since the 2019 policy change, none resulted in findings of misconduct. These 16 inquiries arose from various retaliation claims, not solely matters of data analysis and integrity. ### Comments on Preliminary Findings and Consultation - The Panel shared preliminary findings and recommendations with the Executive Board’s Steering Group on Institutional Safeguards, Management, LEG, HRD, Heads of the DRS and related offices, SWG IG/SV members, OIA, and others; the Panel received and benefited from comments. ### General Principles for Managing Workplace Conflicts and Resolving Disputes - Guiding principles: accessibility, accountability, efficiency, responsiveness, and transparency. - Emphasis on conflict prevention, informal resolution, confidentiality, and protection from retaliation. - Expectations: - Management must demonstrate willingness to resolve disputes; the threshold for informal resolution should be low and accessible. - Parties should seek early and amicable resolution; formal appeal or tribunal access should be last resorts. - An efficient and credible system requires high-level commitment to accountability and allocation of required resources. - Contextual considerations: - Employment relationships are inherently unequal and subject to issues including career-related matters, compensation, interpersonal grievances, disciplinary matters, bullying, harassment, misuse of Fund resources, and retaliation. - Disputes should be handled efficiently and speedily; protracted and over-legalized disputes undermine organizational interests. - System characteristics: - A good dispute resolution system should be accessible, transparent, non-discriminatory, fair, expeditious, authoritative, and ultimately independent; it must respect the rule of law. - Strategic changes to the DRS may fail without cultural transformation to better prevent and punish retaliation, transparently redress misconduct, and create expectations that complainants’ careers will not be disadvantaged relative to perpetrators. - Incentives: - The Panel repeatedly examined incentives that either support or counteract a culture of effective and fair dispute resolution; many findings and recommendations arise from this incentives analysis. ### The Panel’s Findings and Evaluation — General Issues and Observations - Compliance and scope: - The Fund has implemented statutory obligation under Rule N-15 to provide “appropriate procedures” for complaints and grievances concerning consistency of actions with personnel regulations. - The Fund has a comprehensive internal body of law covering employment terms and conditions and providing multiple formal and informal mechanisms for workplace concerns. - Staffing and capability: - DRS and related offices are staffed with talented professionals with extensive dispute resolution experience, often gained in other international organizations. - Cultural caveat: - A DRS can be well-designed on paper but ineffective if organizational culture prevents use or fails to hold senior managers accountable. - Alignment with other reviews: - The Panel considered the Report of the SWG IG/SV, noting it provides a positive view of some aspects of the DRS and highlights areas for improvement; the SWG IG/SV observed that despite progressive changes and statistics on access, staff surveys continue to show reticence to use or trust the DRS and cited historical survey results indicating low confidence and fear of retaliation. *External Panel of Experts’ Review of the IMF’s Dispute Resolution System — Chapter 11.03 of the Staff Handbook (excerpt provided).* ### Appendix II. ### Appendix II. ### Culture, trust, and staff perceptions - Pulse Survey and stakeholder views: - Just 39, 28, and 44 percent, respectively, had favorable views (context: unspecified items in Pulse Survey). - On whether there is a conducive environment for the Fund to listen to or respond to staff ideas, problems, or complaints, just 40 and 30 percent had a favorable view, respectively. - Just 19 percent had favorable views on the willingness of staff to reveal problems or errors to their supervisors. - Panel synthesis: - A pervasive theme is the lack of dialogue and an overly hierarchical culture, which discourages staff from using the DRS and reduces confidence in the system. - Staff expressed fear and anxiety about raising issues; complainants reported being regarded as troublemakers and often suffering retaliation. - Stakeholders consider that DRS procedures are weighted against employees and in favor of the Fund; users report inequality of arms between unrepresented staff and the Fund’s extensive resources. - Majority of stakeholders welcomed the DRS review and considered reforms timely and needed. - Relation to prior reviews: - Findings confirmed by the Report of the SWG IG/SV and earlier reviews; SWG IG/SV noted that “business culture issues affect the work environment and have the potential to constrain voice—before issues reach the DRS and its offices.” - SWG IG/SV emphasized perceptions of inaction or delayed action by managers/institution despite 2017 harassment policy changes requiring managers to report issues and cases. ### Informal dispute-resolution offices: roles, strengths, and concerns - General practice: - Employees frequently seek resolution via Peers for a Respectful Workplace, immediate supervisors, Strategic HR Partners/HR Business Partners, and the Staff Association, in addition to two independent professional informal offices. 1) The Office of the Ombudsperson - Created in 1979; available to current and former staff and contractual employees for any employment-related issue. - Mandate: independent, informal, neutral, confidential resource; clarifies policies, advises on options, may engage management with employee authorization; can facilitate conciliation, referrals, mediation, or other methods; coordinates Independent Witness Program (IWP). - Panel concerns: - Executive Directors’ Offices staff are excluded from the Ombudsperson Terms of Reference and thus lack access. - Recommendations by the Ombudsperson are not always adopted by Management, often without explanation. - Ombudsperson is a contractual employee; Fund is an outlier compared with other international organizations. - Panel view: organization should strengthen the office and enhance its role and status; Ombudsperson should have more direct and regular contact with the MD and the Executive Board to highlight systemic sources of conflict. - Note on employment terms: - Following a 2021 review, management approved staff-like benefits for future Ombudspersons (including relocation benefits, education allowance, expatriate allowance, spouse and child allowance, Medical Benefits Plan coverage, annual and sick leave, and short-term disability insurance), but these reforms have not been implemented. Existing Heads of DRS Offices should be given the choice to retain current contractual status or adopt the new changes. 2) The Office of the Mediator - Created in 2012 to provide mediation and facilitation to current/former staff and contractual employees at Headquarters and overseas offices; mediation is voluntary and confidential; if mediation fails or is declined, aggrieved parties may proceed to other DRS options within applicable time limits. - Mediator coordinates Peers for a Respectful Workplace program. - Panel concerns: - Mediation is entirely voluntary; no party, including managers or supervisors, is required to attend or participate, which limits early resolution. - Mediator is a contractual employee with limited employment terms (similar to the Ombudsperson concern). - Panel recommendation: Mediator’s role should be strengthened and empowered with additional resources and access to the Executive Board. ### Formal processes: Administrative Review — practice, bottlenecks, and consequences - Purpose and procedure: - Administrative Review allows a staff member to contest a managerial decision that impacts work, career, or benefits by requesting review by an authority higher than the decision-maker. - Administrative Review is required before submission to the Grievance Committee and the Administrative Tribunal (and for contractual employees before arbitrator submission). - If the Director, HRD does not deliver an administrative review decision within 45 days, the staff member may proceed to the Grievance Committee. - Structure: - Two levels of review: first-level by Department Head or benefits Division Chief (or directly to Director, HRD); second-level to Director, HRD. - Director, HRD is assisted by Employment Practices Team (lawyers and human resources specialists) reviewing requests legally and aiming to prevent disputes and resolve them amicably; Team also handles policy updates, complex separations, Financial Disclosure Program administration, Managers Community of Practice, and advisory roles across HR. - Timeliness problems (principal issue identified by Panel and acknowledged by HRD): - Responses often provided well outside the statutory 45-day deadline (for cases reviewed by Director, HRD). - Average period for review of such cases: - 47 days in 2016 - 104 days in 2017 - 106 days in 2018 - Longest review periods in each year: - 79 days in 2016 - 282 days in 2017 - 173 days in 2018 - Panel learned of one instance where response took almost two years, and of other instances with no response. - These delays are contrary to well-established jurisprudence in international administrative law. - Causes and institutional implications: - Delays attributed to a substantial increase in the number of requests filed, possibly due to successful efforts raising awareness about the DRS, compounded by resource constraints and increased complexity of requests. - HRD feedback cited availability of staff with relevant knowledge, mission/leave schedules, and requesters seeking more time as factors, but acknowledged principal factor was resource constraints. - Short-term contractual hires have been used to address caseload, but Panel notes need for long-term staffing resources and allowing administrative review staff to focus on cases rather than other HR responsibilities. - Consequences: - Long delays or lack of responses reduce willingness of employees to seek redress via Administrative Review. - Staff may be forced to proceed to the Grievance Committee despite preferring internal resolution. - Perception of preference for formal, lengthy, adversarial dispute processes. - Raising awareness without adequate resourcing undermines credibility and effectiveness of DRS. - Panel suggests potential cost savings from earlier resolution versus extensive resources consumed by cases progressing to Grievance Committee and Administrative Tribunal. ### Panel findings and priority areas for improvement - Key findings: - There are issues that significantly inhibit the effectiveness of the DRS. - Organizational culture (fear of reprisals, perceptions of impunity, hierarchical structure, visa status concerns, long careers, importance of informal networks) constrains voice and use of DRS. - Inequality of arms in formal processes and skepticism about the chances of success deter staff from using the system. - Informal offices (Ombudsperson, Mediator) are generally well-regarded but under-resourced and limited by contractual employment terms and restricted access (e.g., Executive Directors’ Offices exclusion from Ombudsperson Terms of Reference). - Administrative Review suffers from chronic delays due to resource constraints and increased caseload. - Priority improvement areas (as identified by the Panel): - Strengthen and enhance the role, status, resourcing, and access of the Office of the Ombudsperson, including more direct and regular contact with the MD and the Executive Board. - Strengthen and empower the Office of the Mediator with additional resources and access to the Executive Board; consider measures to increase manager/supervisor participation in mediation. - Provide sufficient long-term staffing and dedicated focus for Administrative Review to meet the 45-day statutory deadline and handle increased caseload and complexity. - Address contractual employment terms for Heads of DRS Offices, giving existing Heads choice regarding converted staff-like benefits. - Take early, anticipatory, and proactive steps to address business-culture issues, and improve awareness and training as emphasized by SWG IG/SV. *Source: Appendix II.* ### 49. The annual reports on the administrative review process are an important feature of ### 49. The annual reports on the administrative review process are an important feature of ### Administrative Review — annual reports and outcomes - Annual reports promote transparency by increasing understanding of the operation of the system. - The Panel was informed that the annual reports have not been issued for the calendar years 2019–2021. - Recommendation: The Fund should prioritize the reinstatement of these annual reports to increase transparency, accountability, and trust in the Administrative Review process. - Statistics (2017–2021): the majority of administrative review cases were determined wholly or substantially against the individual staff member. - 2017–18: 32 percent and 50 percent respectively of first level administrative review requests were granted. - 2017–18: 27 percent and 0 percent of the second level administrative review decisions issued granted the employee’s request; in two additional cases in both years an agreed informal resolution was reached. - Observation: Low success rate combined with inordinate delays is unlikely to instill confidence in the administrative review process. ### Grievance Committee — role, composition, and process - Purpose and procedure: - Staff dissatisfied with Administrative Review may present grievances to the Grievance Committee (established in 1981). - Parties file written pleadings; Committee typically conducts oral hearings with evidence from witnesses and documentary exhibits. - Proceedings are strictly confidential. - The Committee reviews contested decisions for consistency with Fund rules, regulations and procedures and potential abuse of discretion. - The Committee issues written recommendations to the Managing Director for a final decision. - Composition: - External Chair (appointed by the Managing Director after consultation with the Staff Association Committee), two other Fund staff members (a SAC appointee and a Management appointee), and one administrative assistant. - Stakeholder concerns and observations: - Perceived familiarity between the Grievance Committee Chair and LEG raised concerns about the appearance and reality of impartiality. - Complaints that Committee recommendations did not recommend financial remedies perceived as adequate by complainants, including legal fees, even where Tribunal jurisprudence provided for such awards. - Some stakeholders felt the Committee’s process drew more from U.S. employment law than international administrative law, raising “repeat player” influence concerns. - Committee recommendations have not been published since 2018, disadvantaging staff who lack access to Committee precedents (while the Fund has access). - Difficulty tracking Committee cases that later go to the Administrative Tribunal; lack of published precedents may hinder consistency and staff preparation. - Timeliness: - The Grievance Committee process takes an average of 428 days to complete — the longest period of all the offices in the DRS. - Contributing factors: requests for extensions, witness interviews, an unusually elaborate discovery process, and availability of staff serving on the Committee while performing regular duties. - Panel recommendations for the Grievance Committee: - Make the process less “judicial” and quicker to better achieve fairness and efficiency. - Consider limits on length of pleadings and other submissions; reduce filing and submission periods; reduce elaborate discovery; shorten Committee recommendations. - Failure to meet required timelines should result in an adverse inference drawn to the benefit of the complainant. - Reconsider the Committee’s role so it functions as a “true” peer review process with equity as a core consideration. - Consider alternative, less time-consuming models to advise Management. ### Administrative Tribunal — jurisdiction and timeliness - Established in 1994 as the ultimate dispute resolution body for staff challenging administrative decisions affecting employment conditions. - Tribunal composition and rules: - Composed of five external judges providing an independent judicial forum. - Staff must exhaust Administrative Review and Grievance Committee before appealing, unless challenging a regulatory decision (in which case direct appeal is possible). - All judgments are final and binding; published on the Tribunal’s public website with anonymization where good cause is shown. - Access by contractual employees: - Contractual employees do not have access to the Grievance Committee or the Administrative Tribunal; they use final and binding arbitration before a sole arbitrator. - Observation: Other organizations do not distinguish between staff and contractual employees for Tribunal jurisdiction; no apparent principled reason to deny equal access. - Registry staffing: - Two employees: a full-time Registrar and a part-time assistant, both contractual on renewable contracts; roles are long-term and essential. - Timeliness: - Tribunal caseload average: 1-3 cases per year. - Average period of approximately 296 days between submission of final pleading and rendering of a judgment is considered unduly lengthy. - Recommendation: Tribunal should take steps to reduce time to dispose of cases. ### Ethics Office — mandate and reporting - Established in 2000 to provide independent ethics advice and promote ethical awareness through outreach and training. - Headed by the Ethics Advisor who reports directly to the Managing Director. - Employment terms and benefits: - Following February 2021 changes, the Ethics Advisor newly appointed in January 2022 receives staff-like benefits including expatriate allowances. - DRS employees are currently “contractual employees” rather than staff on renewable fixed-term or open-ended contracts; current contracts do not provide benefits regular staff receive (expatriate allowance and Staff Retirement Plan). - Pension benefits limited to the Voluntary Savings Plan to which the Fund makes a 5% contribution. - Panel benchmarking: Fund was quite unique in formerly using universal contractual approach for DRS offices; considered precarious for long-term functions. - Recommendation: Ethics Office annual report should be presented to and discussed with the Executive Board, followed by a management response and Executive Board follow-up. ### Office of Internal Investigations (OII) — mandate, independence, resourcing, and practices - Established in 2016 to undertake preliminary inquiries and administrative investigations into alleged misconduct involving Fund staff and contractual employees. - Investigations may be initiated at request of Managing Director, Director of HRD, OIA, a staff member, or at discretion of the Internal Investigator; OII also investigates reports from the Integrity Hotline under oversight of an Integrity Hotline Oversight Committee. - All investigations guarantee due process and are governed by integrity, professionalism, fairness, impartiality, and objectivity. - OII does not have a Terms of Reference setting its mandate. - Employment terms and tenure: - OII staff are not entitled to same benefits as regular staff and can only be hired/re-hired for a lifetime maximum of 4 years; for OII this restriction has been waived so staff can be extended indefinitely but still lack parity with regular employees. - Head of OII contract: maximum seven years (2 years initially, renewable for 5 additional years). - 2021 changes authorized conversion to fully benefited positions but do not resolve issues for current employees due to reliance on attrition for implementation. - Authorization to investigate: - Pursuant to GAO 11, Chapter 11.02, Section 4.3, OII must request authorization from the Managing Director or the Director HRD to undertake a full investigation. - Evidence presented shows Management has never declined such a request and authorization is usually provided promptly. - Panel recommendation: OII, as an independent office, should have authority to decide to undertake investigations without seeking authorization to enhance perceived and actual independence and efficiency. - Timeliness and communication: - Investigations, particularly preliminary inquiries, can take an inordinately long time, leaving staff in difficult environments for extended periods. - Annual Reports of OII for 2016 to 2020: harassment formed the largest number of complaints, with 84 claims made. - Concerns that witnesses were not interviewed and written evidence not used several months into investigations; lack of regular/transparent communication with affected staff. - Recommendation: Provide OII with sufficient resources to meet expected timelines and communicate transparently. - Department-level investigations: - Department Heads may initiate Department-level investigations for misconduct that would not warrant disciplinary measures exceeding a written reprimand. - Panel view: Investigations should be centralized; OII should be empowered and resourced to conduct all investigations for consistency. - Gaps in policy coverage: - One instance where OII found actions that a reasonable person would consider misconduct but did not pursue a full investigation because no written policy dealt with specific conduct; Panel notes violation of general ethical standards under the Code of Conduct still warrants action. - Perception of insufficient consequences: - Review of Pulse Survey, HRD and OII disciplinary recommendations and actions, and interviews indicate many believe insufficient disciplinary consequences are applied when wrongdoing is found. - Lack of sharing of OII inquiry outcomes and disciplinary actions contributes to a perception of impunity, especially for higher level supervisors and managers. - Panel recommendation: Greater transparency — share allegations via regularly updated intranet data, actual timeline for each inquiry, outcome of the inquiry (substantiated whole, in part or unsubstantiated), recommended consequence, and actual consequence — to improve organizational culture, build trust in the DRS, and hold the Fund accountable. ### Retaliation — Independent Review and accountability - Retaliation policy amended in February 2019 (GAO 11, Annex 11.01.6). - Independent Review: - Establishes an independent and expedited review by OII of retaliation complaints to be completed within 45 days, provided claims submitted within six months of the alleged retaliatory act. - Standard of proof in Independent Review: OII must consider whether there is clear and convincing evidence that the same adverse action would have been taken, for separate and legitimate reasons, even in the absence of the complainant’s protected activity. If there is no clear and convincing evidence, OII will conclude that retaliation has occurred. - Panel observations and recommendations: - Independent Review focuses on corrective action for the victim’s effects but does not establish individual responsibility for the retaliator. - To establish individual responsibility, a separate misconduct investigation is required using the “preponderance of the evidence” standard, which is difficult to satisfy. - Evidence since 2019: no misconduct findings in retaliation inquiries/investigations, even in cases requiring up to 200 days of investigation. - Panel recommends rules be amended so that when Independent Review concludes retaliation has occurred, a full misconduct investigation should follow automatically without OII seeking authorization from Managing Director or HRD Director. - The conclusion of retaliation by Independent Review should obviate the need for an additional preliminary enquiry. - Consider amending rules to ensure some consequence (short of finding misconduct) for employees whose actions were deemed retaliatory and reversed as corrective actions (e.g., noting in performance evaluations). - Recommendation to explain rules and processes applicable to retaliation to all stakeholders to reduce confusion. - Disclosure of investigation reports: - Current practice: a written report of the investigation is shared with the subject only, not the complainant. - Panel considers an appropriately redacted copy of the investigation should be made available to the complainant, with an obligation on the complainant to respect confidentiality of the investigation and witnesses. ### Procedures related to the Managing Director and Executive Board - Dispute resolution mechanisms for the Managing Director and Members of the Executive Board are not well defined outside the ethics framework. - Advisors and Assistants in Offices of the Executive Directors (OED) have standing to challenge matters affecting terms of employment before the Administrative Tribunal but do not have access to other parts of the DRS. - Review of exceptions to policy in special circumstances is undertaken by the Executive Board’s Committee on Administrative Matters rather than HRD. - Ombudsperson terms of reference preclude access by Executive Directors, Alternate Executive Directors, and OED Advisors or Assistants as they are “not staff members and are appointed by and serve at the discretion of Executive Directors”. - Panel view: Every employee of the Fund, regardless of status, should have access to the full benefits of a framework regulating rights and obligations as employees. - Members of the Executive Board must comply with the IMF’s Code of Conduct for Members of the Executive Board; the Managing Director is obligated to comply with staff ethical obligations as modified by appointment terms. - Recommendation: Communicate these specific rules more clearly to staff; Ethics Committee supports and oversees ethical conduct of the Managing Director, Executive Directors, Alternate Executive Directors, and other Executive Board members. *External Panel of Experts’ Review of the IMF’s Dispute Resolution System — excerpt provided in the supplied content unit* ### Appendix II, paragraph 6. ### Appendix II, paragraph 6 ### Ethics Committee composition and role - The Ethics Committee is composed of a Chairperson, four Executive Directors and five alternate Executive Directors. - Functions: - Offers guidance to such officials on their ethical obligations. - Oversees the financial disclosure program for members of the Executive Board. - Considers allegations of misconduct relating to persons under their purview, which may be brought directly, through a Fund official, the Ethics Advisor, OII, or the Fund’s Integrity Hotline. - May initiate investigations and may recommend appropriate action if misconduct is concluded to have occurred. - Panel observations: - The Panel notes other institutions have an external oversight or ethics committee consisting of former members of the top decision-making body. - The Panel considers that independence of the Ethics Committee would be underscored by including members who are not members of the Executive Board but have a high standing in ethics matters and are familiar with the Fund’s work. - Staff of the Fund who serve the Ethics Committee should not provide such services in cases where conflicts of interest may arise for those staff. ### Rules for the Managing Director (MD) and Executive Board - Staff perceptions: - Staff perceive procedures and rules relating to the Managing Director and Executive Board as being less strict than those applying to Staff Members. - Panel benchmarking: - Some comparator institutions have rules applicable to the head of the institution that are stricter than rules for staff; these are considered best practice. - Panel recommendations and rationale: - The Fund should review and adjust rules governing the Managing Director and the Executive Board to account for leadership roles and higher potential reputational damage, making those rules stricter than those for staff, in line with best practice at the ECB and Deutsche Bundesbank. - Public attention to conflicts of interest has increased; the Fund should anticipate these developments. - The Panel recommends that the MD and the DMDs publish yearly the type of financial assets they hold (practice at the ECB or European Commission). ### Transparency and reporting - The Panel notes the Ethics Committee does not issue an annual report made available to staff; in other organizations ethics committees issue annual reports to staff in the spirit of transparency. - The Panel recommends greater transparency and communication of sanctions and outcomes (e.g., regular anonymized reporting on cases of unethical conduct and consequences for wrongdoers). ### Undue influence and data integrity concerns - Multiple staff alleged undue influence to change report contents or recommendations sometimes due to political pressure; some staff alleged retaliation when they spoke up. - The Staff Working Group on Data and Analysis and Data Integrity specifically examined undue political influence in its report. - The Panel recommends safeguards and mechanisms for allegations of undue influence or political pressure, including broadening Ombudsperson and Mediator terms of reference to deal with such matters informally and considering interim protections. ### Office of Internal Audit (OIA), Office of Internal Audit (OIA) and Office of Risk Management (ORM) - OIA is not part of the DRS but is important to ensure the DRS works as intended; OIA assesses implementation of Management’s action plans. - Risks arise if staff feel unethical behavior or undue political influence cannot be flagged without fear of retaliation. - The Panel recommends: - More regular discussion about these risks at Executive Board level. - Evaluate advantages/drawbacks of establishing an Audit Committee of the Executive Board and consider relationships with the External Audit Committee reporting to the Board of Governors. - Address shortcomings in the OIA Audit Report of the Fund’s Enterprise Risk Management (ERM) Framework (2021), strengthen ORM’s challenge function in the second line of defense, and evaluate how to better monitor implementation of OIA’s and IEO’s recommendations. ### Office of Budget and Personnel (OBP) - OBP decisions determine the extent to which recommendations are implemented; budgetary constraints influence funding of offices with roles in dispute prevention and resolution. - The Panel believes many recommendations will shift resources toward earlier dispute resolution, which is less expensive than lengthy formal processes. - Budgetary and staffing shortages are often cited for missed timelines; most IFIs benchmarked meet required timelines, reflecting low budgetary priority for timely dispute resolution at the Fund. - Recommendation: budgetary decisions should support effective functioning of dispute resolution processes; overall budgetary impact expected to be positive. ### Key Panel findings and recommendations (summary of VI. THE PANEL’S RECOMMENDATIONS) - Basis: Pulse Survey results, interviews, benchmarking, and review of DRS elements. - Leadership: Tone from the Top 1. Standards, procedures, and rules for the Managing Director and Executive Directors should be higher than those set for staff. 2. The Managing Director and the Deputy Managing Directors should publish the type of financial assets they hold yearly, as per the practice at the ECB or the European Commission. 3. The personnel of OED should be granted access to all parts of the DRS System, including the informal mechanisms. 4. The Executive Board should change the Ethics Committee composition to include a majority of individuals who are not Board members but have high standing in ethics matters and are familiar with the Fund’s work (for example, former Governors). 5. In cases involving the conduct of the Managing Director, or where a potential conflict of interest may arise, the Secretariat of the Ethics Committee should be an external lawyer, rather than staff of the Fund. 6. The Managing Director and the Executive Board should lead culture change efforts across the Fund with strong, visible messaging backed by action, and make inculcation of a culture of dialogue and integrity a strategic priority. 7. Unethical conduct should be penalized consistently, and sanctions imposed should be communicated to staff (for instance through regular anonymized reporting on cases and consequences). - Building Trust in the DRS — Retaliation (recommendation 8 with subpoints) 8. Strengthen anti-retaliation policy and practice, including: i. Amend rules to require alleged wrongdoer to bear burden of explaining actions did not have retaliatory motive (in line with other international organizations and IFIs). ii. Where Independent Review concludes retaliation occurred, that determination should be considered in performance evaluations with appropriate consequences. iii. Amend rules to require an investigation for individual responsibility in all cases where Independent Review concludes retaliation occurred. iv. Invest in proactive communication of the policy and its operation to all DRS stakeholders. v. Offer training to staff and employees about rights and protections from retaliation; supervisors should be trained to avoid retaliatory behaviors. vi. Proactively determine whether interim protective measures are needed and recommend urgent implementation to Management/HRD, without requiring alleged victim to request such measures, with victim consent. vii. Extend period for access to Independent Review with special protective standard of proof for retaliation claims to 3 years from the alleged retaliatory act to align with comparators. viii. Closely monitor, evaluate, and measure efforts and effectiveness of measures to support no-retaliation and “speak up” culture via more frequent surveys run entirely by external and independent providers. ix. Develop and strengthen safeguards/mechanisms for allegations of undue influence or political pressure; consider broadening Ombudsperson and Mediator terms of reference; consider roundtable discussions Fund-wide on data analysis and integrity. - Transparency and Access to Information 9. Publish information regarding outcomes of cases considered by the Executive Board’s Ethics Committee to staff via annual or periodic reports on the Fund’s Intranet. Promptly resume publication of information regarding the Administrative Review process and the Grievance Committee. Ethics Advisor should consider complaints of excessively redacted reports and make changes as determined by ethical principles. 10. Consolidate all DRS information on one intranet webpage with links to each DRS office/process. Create a Tool-Kit for Self-Represented employees with timelines (stated and in practice), percentage distribution of outcomes for past 2 years, and detailed guidance for each formal step. Adopt UN best practice sample tool kit. Post real-time case “tracker” on a secure intranet page for staff to monitor case progress. Intranet should show nature of complaints over past two to five years, actual timelines, whether allegations were substantiated in whole or part, recommended consequence/decision when substantiated, and action/decision taken with reasoned explanation if Managing Director chooses not to follow recommendation. Panel reviewed this data and recommends sharing to improve transparency, trust, and accountability. - Strengthening the DRS Offices and Processes 11. Implement changes made to the DRS employment framework in early 2021 to allow DRS leaders and employees to elect conversion to staff positions with full benefits for the remainder of their terms. 12. OII should not require authorization from Management or HRD before investigating cases; create Terms of Reference for OII. 13. Centralize investigations of allegations of misconduct and have them conducted by OII only, not by Departments. 14. Heads of the DRS and related offices should have opportunity to report to the Executive Board at least once a year and meet with the MD as needed; these meetings should not be delegated to DMDs. 15. OIA should be independent; abolish requirement for its work plan to be approved by management. Establish an “internal” Audit Committee of the Executive Board so OIA can report directly to them. 16. Strengthen implementation of the “3 Lines” Model by addressing shortcomings in the OIA ERM Framework Audit Report (2021), strengthen ORM’s challenge function, evaluate OIA capacity constraints, and monitor implementation of OIA’s and IEO’s recommendations. 17. Incentivize or prioritize time required for peer reviewers, witnesses, or others assisting DRS to process disputes more efficiently; retain oral hearings at the Grievance Committee or future Peer Review to ensure fairness and transparency. - Organizational Culture — Managing Director, Executive Board, HRD and LEG, Supervisors, All Employees 18. When weighing confidentiality versus transparency on misconduct matters, err on the side of transparency for substantiated allegations; significant, visible penalties for substantiated wrongdoing, especially retaliation, harassment, and discrimination. Peer review panel should recommend consequences and draft response; peer review panel should take no longer than 15 days from OII’s finding of a substantiated allegation. 19. Visible, strategic and frequent communication by the MD against retaliation; visible action when retaliation substantiated. 20. MD should host roundtable discussions with Office of Innovation and Change, Ethics Office and Ombudsperson to generate buy-in on managing workplace challenges; information should inform new policies. 21. Executive Board should support efforts to create internal consensus and more detailed policies to resolve concerns about political pressure on data integrity and analysis; Ethics Officer and Ombudsperson should engage in roundtable dialogues; Executive Board members should be active participants. 22. Hold an internal Executive Board meeting with external facilitators or Ombudsperson/Mediator to discuss ways to support transparency in ethics matters at Executive Board and MD levels and reach shared understandings to improve culture. 23. Hold each other accountable to highest ethical standards; use informal influence to hold each other accountable. 24. Complainants should not be required to be re-assigned if they do not desire it; alleged perpetrator should bear inconvenience or negative career impacts when allegations substantiated. Those who prevail should receive HRD support to ensure careers not negatively impacted. Periodic (e.g. every 3 years) transparently published review to assess HRD and LEG support for employees who use and prevail through DRS. 25. Staff who serve as peer reviewers, witnesses, or otherwise assist DRS should receive positive acknowledgement in performance reviews. 26. Create accountability measures for HRD and LEG and managers for use in performance reviews and promotion decisions; missed timelines should be reflected on individual performance reviews. 27. Supervisors should engage in collaborative problem-solving and dialogue on difficult issues (e.g., data analysis and integrity) with teams; request facilitation from Ombudsperson or Mediator as desired. 28. Employees should initiate or request collaborative conversations around culture, brainstorm solutions with teammates and supervisors, reach consensus on shared team values, and revisit them when problems arise. 29. Employees should ask for help and be willing to help; be bold in asking for help from HRD, Mediator, Ombudsperson; if informal efforts fail, use the DRS. Volunteer to participate in DRS as Ethics Ambassador, Peer for a Respectful Workplace, etc. - Additional Culture Change Recommendations 30. Launch a Fund-wide Culture Change Program to establish an organizational culture of dialogue and integrity, break silos, promote a true “speak up” culture, and create a DRS that supports fairness and staff voice; include listening sessions and unit-based efforts. 31. Establish an Ethics Ambassadors Program with a point of contact in each department to promote ethics, core values, and answer ethics questions/concerns; Ethics Office to provide training and support. (See Institute of Business Ethics website for guidance.) - Earlier, Less Formal, More Collaborative Dispute Resolution 32. Create an Employee Relations Unit within HR, separate from team handling Administrative Review requests, to enhance adherence to timelines and early dispute resolution. 33. Require parties to first participate in problem-solving conversations facilitated by an Employee Relations Specialist and/or Mediator or Ombudsperson, subject to mediator’s view on suitability for mediation. 34. Provide transparent learning process for Administrative Tribunal cases; when HRD/LEG defend the Fund and lose, draft memo on lessons learned for Management and Ethics Committee; schedule yearly Executive Board discussion of all cases. - Fairness and Efficiency 35. Engage lawyers whose role is to advise and represent staff on employment-related matters before the DRS and establish an office within the Fund for this purpose. 36. Make first step of Administrative Review mandatory for benefits disputes, optional for other types. 37. Implement short, enforced timelines (for example, 20 days for performance review disputes) for administrative review cases, preliminary assessments, and investigations, with consequences for missed timelines. Grievance Committee and Administrative Tribunal should heavily weigh missed timelines by the Fund when making awards. 38. Ensure HR, DRS, and related offices are adequately staffed to meet timelines; consider objective and transparent evaluation of resources needed. 39. Re-brand and re-cast the Grievance Committee into a faster peer review mechanism emphasizing equity and being less judicialized, reducing time before recommendation reaches Management. 40. Create a form for filing administrative review requests that includes a section for complainant to describe measures desired from HR; helps memorialize complaint date and encourages dialogue. 41. Devote greater efforts to offer a comparable position within the organization to an employee whose employment was wrongfully terminated. 42. All employees (including contractual employees) should enjoy the same access to all DRS and related offices, including the Grievance Committee and the Administrative Tribunal. - Follow Up 43. The Panel would welcome joining the Executive Board’s discussion to further explain views and recommendations. Management should prepare a specific and monitorable implementation plan and submit it to the Executive Board within three months of the Board’s discussion of the Panel's report; the Panel would comment on proposed actions. The Office of Internal Audit could prepare an annual report on progress in implementing proposed actions. ### Concluding observations (from the Panel) - The Panel commends the Managing Director and Executive Board for undertaking the review with openness and candor. - Ensuring a fair, efficient, transparent, and rigorous process for prevention and early resolution of disputes is critical for Fund employees to focus on mission achievement. - The Panel appreciates input from dispute resolution experts at peer institutions and current and former Fund employees and hopes the report provides specific, actionable recommendations to support and empower employees and the Fund’s mission. *EXTERNAL PANEL OF EXPERTS’ REVIEW OF THE IMF’S DISPUTE RESOLUTION SYSTEM — Appendix II, paragraph 6* ### Appendix I. International Monetary Fund—External Review of the ### Appendix I. International Monetary Fund—External Review of the Dispute Resolution System—Terms of Reference ### Background - The IMF’s purposes: (i) monitoring the global economy and the economies of member countries (surveillance); (ii) lending to countries (financial assistance); and (iii) giving practical help to members (technical services). - The IMF is governed by a resident Executive Board and accountable to the 190 countries that make up its membership. - Rule N-15 of the Fund’s Rules and Regulations calls for “appropriate procedures” to be “established for consideration of complaints and grievances” of staff, underpinning the Dispute Resolution System (DRS). - The DRS is comprised of three pillars: informal services, formal services, and ethics and integrity. - Informal services: - Emphasize resolution at the earliest and least-formal level. - Multiple channels: managers, HR partners, Peers for a Respectful Workplace (PRW) staff volunteers. - The Ombuds and Mediator are independent, impartial experts who may assist staff. - Formal services: - Venues to resolve issues including harassment or abuse of authority. - Staff and contractual employees may request administrative review of career or benefits decisions, may challenge findings before a Grievance Committee, or ultimately, an Administrative Tribunal. - Ethics and integrity services: - Ensure compliance with the Fund’s standards of conduct. - The Ethics Office provides advice and guidance to managers and employees and oversees compliance programs. - The Office of Internal Investigations (OII) conducts investigations into allegations of misconduct. - The Fund has an Integrity Hotline, administered by an independent third party, for anonymous and confidential allegations of misconduct or other concerns, including from the public. - Dispute mechanisms for the Managing Director (MD) and Board officials in Offices of Executive Directors (OED) are not well defined outside the ethics framework. - OED Advisors and Assistants have standing to challenge matters affecting terms of employment before the Administrative Tribunal, but not the informal mechanisms. - The Ethics Committee of the Board supports and oversees ethical conduct of the Managing Director, Executive Directors, Alternate Executive Directors, and other Board officials. - The Executive Board concluded its review of the Investigation of the World Bank’s Doing Business 2018 report on October 11, 2021, noting confidence in the IMF’s channels for complaint, dissent, and accountability while considering “possible additional steps to ensure the strength of institutional safeguards.” ### Objectives and Scope of the External Review - Purpose: - Conduct an independent, strategic review of the DRS and Board Ethics Committee. - Benchmark the Fund’s DRS against comparators (other international organizations) and best practices, including relevant corporate-sector practices. - Identify strengths and key gaps of the Fund’s DRS. - Cover whistleblower protections and mechanisms for receiving such complaints. - Consider the framework for addressing complaints applicable to the Managing Director and Board officials. - The Panel’s report and recommendations are to be presented to Fund Management and the Executive Board Steering Group on Institutional Safeguards (SG), and to draw on and complement work of the SG and two IMF staff working groups (WGs)—one focused on data and analysis integrity and the other on internal governance and staff voice. ### Topics for Exploration (as specified for the External Panel) Governance and design - Does the DRS provide sufficiently comprehensive and effective channels for raising and resolving disputes? - Is there a need for greater coordination among DRS channels? - Are levels of confidentiality appropriate? - Are whistle-blower arrangements sufficient, including with respect to issues concerning the board and management? - Are the offices of the DRS appropriately resourced to promote effectiveness, visibility, and independence? - Are DRS cases handled in a timely manner? - Would service-level agreements for DRS offices be helpful? - Is the framework for addressing complaints relating to the Managing Director and Board officials, and whistleblower protections for complaints relating to such officials, robust? - Is the oversight and reporting structure sufficiently clear, and does it promote adequate follow-up and accountability? - What arrangements for periodic review of the system are appropriate? Access and Inclusion - Are there critical gaps in the existing DRS framework that undermine an inclusive culture enabling free and open exchange of ideas and disagreements with safeguards to address potential fear of reprisal? - Does ongoing work at the Fund, including follow up to the D&I survey, address these gaps? - What issues affect staff trust and confidence in the DRS? - What are key recommendations for how this can be remedied? Information and Communication - Are there gaps in communication about the status and outcome of disputes to both grievants and other affected parties, processing, and resolution that may affect trust and confidence in the system? - What recommendations can be made to address these gaps taking into consideration the need to preserve confidentiality? ### Composition, Timeline, Administrative Support, and Deliverables - External Panel composition: - Jens Weidmann — Chair. Economist, former President of the Deutsche Bundesbank and Board member of the European Central Bank. Former Chairman of the Board Bank of International Settlement, Advisor to Chancellor Germany’s Chancellor Angela Merkel. - Susan Raines — Professor and Associate Director, School of Conflict Management, Peacebuilding & Development, Kennesaw State University (Georgia, USA). - Olufemi Elias — Judge of the Islamic Development Bank Administrative Tribunal, Judge for Staff Appeals for Special Tribunal, Lebanon. Executive Secretary of the World Bank Administrative Tribunal. - Timeline and deliverables: - The review commenced in January 2022. - A draft report is expected to be presented to the WG, Board SG and Fund Management by mid-March 2022. - A final report will be submitted no later than end-March 2022. - Support and access: - The Panel will be supported by Ruben Lamdany, who will serve as an Advisor. - The Panel will be assisted by a small secretariat of outside experts and may hire external staff for support. - The Panel will have access to all relevant information, except for personnel-related information that cannot be made available for reasons of confidentiality without the consent of the affected party. - The Panel may conduct interviews as it deems appropriate, including with the IMF Executive Board and Members of its Ethics Committee, Fund Management, the WGs, Principals of the DRS, Members of the Administrative Tribunal, staff, and staff affinity groups. - For comparative international practices, the Panel may interview personnel at selected international organizations. *Appendix I. International Monetary Fund—External Review of the Dispute Resolution System—Terms of Reference* ### 4. The Fund’s DRS has developed incrementally over the past four decades. It involves multiple ### 4. The Fund’s DRS has developed incrementally over the past four decades. It involves multiple ### Overview - The Dispute Resolution System (DRS) comprises three pillars: informal services, formal services, and ethics and integrity. - The DRS aims to facilitate prevention, reporting, mitigation, and resolution of workplace grievances—including those involving voice—and to ensure accountability of individuals and the institution. - Head of DRS offices are hired as contractual employees, are independent, report directly to the MD and are not affiliated with a department. ### Informal services - Emphasis on resolving disputes at the earliest and least-formal level; informal engagement does not involve offices of notice and does not make determinative findings. - Multiple channels available for confidential, tailored support that do not entail a formal grievance; informal services may be pursued concurrently. - Key informal roles: - Ombudsperson: impartial expert, assists staff to resolve workplace concerns; not part of formal services. - Mediator: impartial expert, assists staff to resolve workplace concerns; not part of formal services. - Peer for a Respectful Workplace (PRW): staff-member volunteer for peer-to-peer conversations. - All staff have access to informal services at any time. - Most DRS offices offer confidentiality if requested. - “Staff” comprises regular staff with open-ended assignments and contractual staff, including long- and short-term experts and local or field staff. ### Formal services - Formal services provide venues for consideration of employment-related issues, including harassment or abuse of authority. - Invoking formal services puts the IMF “on notice,” and establishes required time limits. - Administrative review: two-tier process in which the HRD Director ultimately decides an outcome; first-level review by the staff member’s department head (for disputes relating to work or career) or by the relevant HRD Division Chief (for disputes relating to benefits), followed by review by the HRD Director. - Appeals: - Staff may challenge HRD Director decisions before the IMF’s Grievance Committee (GC), and ultimately, the Administrative Tribunal (AT). - Contractual employees may request arbitration as a final step after administrative review. ### Ethics and integrity services - Ethics Office (EO): advises and guides managers and staff on ethics and rules of conduct, promotes ethical awareness, and oversees compliance programs supporting the Fund’s Code of Conduct. - Office of Internal Investigations (OII): conducts inquiries and investigations into allegations of misconduct, including breaches of the Code of Conduct; independent of the DRS and reports to the Managing Director. - OII conducts expedited review of retaliation complaints and recommends remedial action to IMF Management. - OII administers the IMF Integrity Hotline, which is for anonymous and confidential allegations and is overseen by an Integrity Hotline Oversight Committee. - Integrity Hotline Oversight Committee: chaired by the Director of HRD and includes the Directors (or designees) of FIN, LEG, OIA, the Internal Investigator, the Ethics Advisor, and a SAC appointee; meets every four months to review summary reports of allegations received. ### Fund informal and formal DRS mechanisms (selected reporting channels and appointments) - PRW: Elected by peers - Ombudsperson: Appointed by Managing Director after consultation with the SAC - Mediator: Appointed by Managing Director after consultation with the SAC - Ethics Advisor: Appointed by Managing Director after consultation with the SAC - Internal Investigator: Appointed by Managing Director after consultation with the SAC - Administrative Review: HR Director - Grievance Committee Chair: Appointed by Managing Director after consultation with the SAC - Administrative Tribunal President and Judges: President appointed by Managing Director after consultation with the SAC and with the approval of the Executive Board; other members appointed by the Managing Director after appropriate consultation including with the Executive Board. ### Other measures and staff representation - Ombudsperson issues an annual report and regularly meets with the Director of HRD and Management to inform on systemic trends and recommend policy or practice changes. - Managers and HR community play a front-line role in monitoring and addressing workplace grievances. - About two-thirds of eligible Fund staff are members of the Staff Association (SAC). - SAC services: legal consultations by the SAC legal advisor and a Legal Assistance Fund. - Independent witness program administered by SAC under the auspices of the Ombudsperson. ### Framework applicable to senior officials and Board - DRS mechanisms available to the Managing Director and Board officials are not well defined outside the ethics framework. - Advisors and Assistants in Offices of Executive Directors (OED) have standing before the Administrative Tribunal. - The Ombudsperson’s terms of reference specifically preclude access by Executive Directors, Alternate Executive Directors, and OED Advisors or Assistants. ### Board Code of Conduct and Ethics Committee - Board officials are bound by the Board Code of Conduct; the Managing Director must comply with ethical obligations applicable to staff as modified by appointment terms. - Ethics Committee: Chairperson, four members, and five alternate members from among Executive Directors; offers guidance and oversees financial disclosure program for Board officials; may initiate investigations and recommend actions. ### History and key milestones - DRS established pursuant to Rule N-15 of the Fund’s Rules and Regulations. - 1979: Ombudsperson established for informal counselling. - 1981: Grievance Committee (GC) established (panel: independent chair, SAC appointee, Management appointee). - 1992: Administrative Tribunal (AT) established as an additional adjudicative forum with authority to render final, binding decisions. - 1998: Code of Conduct adopted. - 2000: Ethics Office established; Ethics Officer overseen by an Oversight Committee. - 2013: Fund’s Core Values established—Integrity, Impartiality, Honesty, and Respect; later expanded to include Excellence and Inclusion. ### Implementation of prior independent reviews and organizational audits - 2002 External Panel recommended strengthening mediation and conciliation; Mediation Office established in 2012. - 2002 recommendation to split consultation and investigation functions of the Ethics Officer; 2016 establishment of OII to investigate allegations of misconduct while the Ethics Office focused on advice, training, and outreach. - Recommendation to broaden scope of grievable decisions accepted: refusal/failure by the IMF to take timely or appropriate actions, particularly in alleged discrimination or harassment cases, could be grievable. - 2011 IEO assessment raised concerns about political constraints; recommended creating an environment encouraging candor and diverse/dissenting views and strengthening incentives to “speak truth to power.” - 2013 OIA review found the DRS well constructed and comparable to other international organizations but noted low staff trust and fear of retaliation. - Less than a third of GC grievants had legal representation, while the Fund was always represented by staff lawyers. - No formal requirement to conduct periodic evaluations of the DRS. - Average duration to avail the entire formal system: 791 calendar days total — administrative review 62 days, GC 428 days, AT 301 days. - OIA recommendations included: communications strategy, action plan to address fear of reprisal, regular reporting on administrative reviews, comprehensive reporting/oversight/accountability framework, explicit procedural guidelines, and streamlining operations. - Management published a Staff Handbook in 2016 and introduced an Intranet page for DRS services. - Other initiatives: PRW program (2013), Independent Witness Program (2017), SAC Legal Assistance Fund (2015), revised Harassment Policy (2017), and revised Retaliation Policy (2019). ### The Fund’s framework for addressing harassment and retaliation - 2017 Harassment Policy revision: clear definitions of harassment, responsibilities of staff and managers, channels to report harassment, and a reporting mechanism managed by the Ethics Advisor and HRD. - Managers/supervisors: first line of activity and response; required to follow standards of behavior, actively address conflicts, and ensure prompt referral to relevant offices. - Failure by managers to take appropriate action may be a performance matter or misconduct. - Departments required to maintain confidential records of allegations and actions; monitored by the HRD Director who reports to Management. - 2019 Retaliation Policy revision: protections for staff engaged in “protected activities” (raising ethics concerns, using the DRS, cooperating with OII/OIA/IEO). - First step in filing a formal claim of retaliation: request an Independent Review (IR) with OII. - If IR does not substantiate the claim, the staff member may initiate the grievance process. - Revisions introduced an expedited review process of 45 days by OII to determine corrective action to be taken by the institution. - Standard of proof for retaliation claims changed to clear and convincing; burden shifted so the Fund must demonstrate the adverse action would have been taken for separate and legitimate reasons even absent the complainant’s protected activity. ### Use of the Fund’s DRS (selected activity and volume indicators) - 2020 Integrity Hotline: 218 reports received; the vast majority were scam calls; 13 pertained to substantial allegations (favoritism, abuse of authority, harassment). - OII in 2020: received 15 direct referrals and 12 referrals from other sources like the Ethics Office and HRD. - Ombudsperson consultations in 2019: 174 consultations; slightly more than half related to evaluation relationships (direct reports, APRs); other prominent issues included career development and progression, ethics, and standards. - Mediation Office in 2020: served 226 staff through resources and programs including 96 who utilized PRW, mediation or coaching; an additional 130 through conflict resolution training, team-building, and the Coffee & Conversation program. - Ethics Office in 2020: responded to 481 requests for advice, mostly conflict-of-interest inquiries, and also workplace fairness, discrimination, and retaliation. - Within formal DRS channels (averages and recent counts): - HRD undertakes 27 first-level administrative reviews (ARs) annually on average; in 2018 and 2019 these related mainly to overseas benefits, home leave, education allowance, and separation and appointment benefits. - HRD Director completed an average of 13 second-level ARs during 2016–18; issues included general benefits, medical plan benefits, performance (APR, PIPs), promotion, appointment terms, selection decisions, separation and non-conversion decisions. - Seven cases filed with the GC in both 2018 and 2019. - AT issues 1–3 judgments per year. - Formal process durations (pre-pandemic averages): administrative review 62 days, GC 428 days, AT 301 days (total 791 calendar days). ### Staff perceptions and survey findings - Persistent reticence to use or trust the DRS despite progressive changes and access statistics. - 2010 staff survey: less than half of respondents had confidence in the DRS and feared retaliation. - 2013 survey: high awareness of workplace values and reporting avenues (88, 95, and 93 percent favorable on awareness of workplace values, avenues for reporting harassment, and avenues for resolving disputes, respectively) but low trust: - 50 percent trusted the integrity hotline. - 38 percent were confident that dispute resolution was effective. - 96 percent reported experiencing or observing sexual harassment in the previous 24 months. - 84 percent reported experiencing or observing discrimination in the previous 24 months. - 74 percent reported experiencing or observing bullying or intimidation in the previous 24 months. - Favorable views on openness and trust: 39 percent. - Favorable views on challenging traditional ways of doing things: 28 percent. - Favorable views on ability to report unethical behavior without fear of reprisal: 44 percent. - Favorable views on whether there is a conducive environment for the Fund to listen to or respond to staff ideas: 40 percent; for responding to complaints: 30 percent. - Favorable views on willingness of staff to reveal problems or errors to supervisors: 19 percent. - 2015 staff survey update: improvements observed in listening to ideas/problems/complaints (+23 percent), applying policies fairly to all staff (+14 percent), creating an environment of openness and trust (+16 percent), and establishing a climate for challenging ways of doing things (+16 percent). - 2017 survey: deterioration on applying policies fairly to all staff (-20 percent), creating an environment of openness and trust (-11 percent), and establishing a climate for challenging traditional ways of doing things (-10 percent). *EXTERNAL PANEL OF EXPERTS’ REVIEW OF THE IMF’S DISPUTE RESOLUTION SYSTEM* ### 19.2021 D&I survey. Results from a 2021 survey on diversity and inclusion noted some ### ppea2022032 - 19.2021 D&I survey. Results from a 2021 survey on diversity and inclusion noted some positive cultural changes. ### Survey findings on enforcement, reporting, and experience - Just 42 percent of participants believe that the Fund’s policies against discrimination or harassment are well enforced, with just a quarter of participants of black or afro-descent in agreement. - While 74 percent of D&I survey participants stated that they know how to report harassment concerns, just 40 percent feel comfortable doing so. - Comfort with reporting drops to a third of staff from URRs. - Comfort with reporting drops to just a quarter of respondents of black and afro-descent. - Respondents of black and afro-descent report higher-than-average percentages of having been the subject of discrimination or harassment, and feel generally less respected at the workplace than average. - The 2021 D&I survey differed from previous surveys as it was the first time that staff were able to self-identify race. Questions also differed from past surveys, making it inapt for identifying trends and comparing against previous surveys. ### Race Equity Action Plan and other Fund commitments (2021–early 2022) - 2021 commitments and measures to improve culture for staff from URRs and of Black and Afro-descent: - Committed to a Race Equity Action Plan. - Introduced listening sessions conducted by management and the D&I Office with staff from URRs and the Network of Black Staff. - Offered racial justice & equity seminars. - Recruited a senior race expert who commenced work in 2021. - Created a racial equity advisory group. - Launched a pilot sponsorship program focused on URR nationals in 2021. - Ensured diversity is weighed in the B-level list and promotion process. - Launched FUN Diversity in early 2022, a self-identification survey in which staff can voluntarily disclose their identity. ### Discussions with DRS office heads — strengths and structural concerns - Office heads view the DRS as well elaborated and comprehensive for the IMF’s size, noting multiple informal and formal channels to register and address disputes, including: - An Ombudsperson, Mediator, and an Ethics Officer. - A separate investigations office. - A multi-tier adjudicative mechanism (administrative review, Grievance Committee, Administrative Tribunal). - Concerns and constraints identified: - Conditions of employment for DRS offices had become outdated and placed the Fund at the bottom against comparators. - Management approval required for investigations by OII adds extra time and may discourage filing allegations due to perceived lack of independence. - Perception of inaction or delayed action by managers or the institution contributes to perceptions of impunity, mistrust, cynicism, concerns with reprisal, and lack of voice. - The multiple-entry-point DRS system is defended as allowing staff to choose based on comfort (gender, nationality, language), though some favor a central entry point. ### Business culture, voice, and fear of reprisal - Factors contributing to constrained voice and fear of reprisals: - Hierarchical structure, staff visa status, long careers, and perceived importance of informal networks to reputation. - Concerns that inaction or delayed action to known or chronic issues heighten fear and mistrust despite 2017 harassment policy changes requiring managers to report issues. - Need for early, anticipatory, and proactive steps to improve the environment and reduce fear. ### Awareness, training, and reporting - DRS office heads emphasized continued information, training, and guidance for managers and staff on standards of conduct, roles, and expected actions. - Recommended measures: - Greater awareness and routine follow-up on disputes and differences of view. - Routine, open discussion of differences and regular, frank feedback on performance to destigmatize disputes. - Enhanced reporting on steps taken to address conflicts while maintaining confidentiality and staff protection. - Additional attention and resources to speed up response times and enhance training and coaching. - Tailored approaches for vulnerable groups (e.g., contractuals, G-4 visa holders, term staff, staff from URRs, and of black and afro-descent). - Robust arrangements to follow up on complaints and ensure accountability for managers, senior managers, departments, Management and HRD. ### DRS resourcing, timeliness, and system design - Resource and process issues affecting timeliness, reporting, and staffing: - DRS employment model approved by Fund Management on February 5, 2021, after consultation with office heads and SAC; changes included additional resources, new skills (e.g., forensic investigation), reduced reliance on rotational positions, and elimination of cooling-off periods for non-head of office employees. - Remaining needs: paralegal/research services, outreach/communications, IT upgrades (knowledge management, searchability), and more proactive/timely responses requiring additional resources within DRS and departments. - For the Administrative Tribunal (AT), the statutory requirement that the President must sit on all panels leads to scheduling difficulties and delays; the role of a Vice President might be considered (would require Board of Governors amendment to Article VII of the Tribunal’s Statute). - Annual Reports are slow to be released, with a backlog of up to four years; reports could include more analysis or information. - Some DRS processes rely on staff volunteers, leading to bottlenecks; virtual meetings and greater volunteer recognition could help timeliness. ### Coordination, visibility, and accountability - DRS office heads noted limited visibility and trust despite outreach; complexity and prolonged follow-up/resolution times may inhibit staff access to services. - Suggested improvements: - Enhanced knowledge management and search tools or more accessible judgment summaries of the AT. - More frequent engagement with heads of department and Management (e.g., reporting to Fund Management and Senior Management meetings). - Sharing annual reports with the Board and other stakeholders on a regular basis to improve confidence, trust, and access. - Distinguish between the DRS/grievance process and the misconduct adjudication process to avoid stakeholder confusion about functions and interlinkages. - Consider a coordination and oversight function for intake and follow-up of DRS cases (relating to harassment, discrimination, retaliation, and other workplace conduct issues) with a common taxonomy across DRS offices to allow aggregation and analytics, while strictly respecting confidentiality and due process. - Consideration of a DRS Coordination Group or early warning system to flag cases requiring rapid management response. ### Recommendations — Immediate actions - Launch an external expert review of the IMF’s DRS to benchmark against other international institutions and private sector practices, assess gaps affecting voice and fear of reprisal, and distinguish between the DRS/grievance process and the misconduct adjudication process. - The external panel was constituted in early January 2022, and the review is expected to report by mid-March 2022. - Launch a pulse survey to inform the external review and expert panel; survey questions under preparation for Management consideration in the second half of January 2022 and launch in February 2022. - Continue and strengthen efforts to provide visibility to and increase understanding of the building blocks of voice and governance: the Code of Conduct, managers’ roles and departmental HR teams, required reporting on harassment, availability of the Integrity Hotline, and the DRS role and functions. - Restart departmental reporting on harassment to the Ethics Office. - Start preparations in early 2022 for a full staff engagement Survey in FY23 reflecting insights from the external review. ### Recommendations — Other areas for consideration - Advance resources for DRS offices to overcome constraints on case processing and timeliness and address specific gaps (e.g., Administrative Review, paralegal or investigation skills, IT and HR legal resources). - Enhanced programmatic training and coaching for staff and managers, targeted to voice and dispute issues along with expected behaviors, with follow-up to ensure sustained cultural change; continue outreach with senior management role-modelling. - Consideration of a “triage function” to identify and intervene early in potential hot spots (e.g., difficult country cases, new or less experienced managers or staff) with engagement, monitoring, and intervention before conflict occurs. - DRS system design: pursue greater coordination, enhanced reporting, and improved accountability, including an established procedure for a regular, formal response from Management to findings and recommendations of DRS office annual reports. - Regular external reviews of the DRS (e.g., every five years) and periodic and continuous monitoring of recommendations from such reviews. *External Panel of Experts’ Review of the IMF’s Dispute Resolution System (excerpt).* ### Appendix III. Survey Questionnaire ### Appendix III. Survey Questionnaire ### 2022 DRS Survey Questions — Questions 1 to 23 - Survey structure: Numbered questions 1 through 23 with associated response types (e.g., Strongly Disagree - Strongly Agree; Disagree - Agree; Yes - No; Open-Text; Multiple Select). - Exact question items: - 1 (Strongly Disagree - Strongly Agree): I can report unethical behavior without fear of reprisal. - 2 (Strongly Disagree - Strongly Agree): I would feel comfortable approaching management above me (i.e., managers above my direct supervisor) about my dispute, without fear of retaliation. - 3 (Strongly Disagree - Strongly Agree): Management above me responds to my ideas, problems, and complaints. - 4 (Strongly Disagree - Strongly Agree): When it comes to being candid, I feel comfortable ‘speaking truth to power’ at the Fund. - 5 (Strongly Disagree - Strongly Agree): I feel like I can express dissenting views on different topics to my manager, without fear of retaliation. - 6a (Disagree - Agree): In my opinion, my work is not unduly influenced (i.e., undermining analytical integrity) prior to finalization and/or publication. - 6b (Open-Text): If you answered "Disagree" to Question 6, please explain in the open text field below. - 7 (Strongly Disagree - Strongly Agree): I feel that the rules governing the conduct of Management are as strict or more strict than those applicable to staff. - 8 (Strongly Disagree - Strongly Agree): The Fund is committed to the fair treatment of all staff regardless of age, creed, disability, educational background, ethnicity, gender, gender expression, nationality, race, religious beliefs or sexual orientation. - 9 (Strongly Disagree - Strongly Agree): In my opinion, the Fund does a good job of promoting the most competent people. - 10a (Strongly Disagree - Strongly Agree): I feel Management and Executive Directors lead by example in promoting ethical behavior. - 10b (Strongly Disagree - Strongly Agree): I feel Management and Executive Directors lead by example in promoting fair and respectful treatment of staff. - 10c (Strongly Disagree - Strongly Agree): I feel Management and Executive Directors lead by example in promoting a culture of openness and integrity. - 11a (Strongly Disagree - Strongly Agree): I feel that my supervisor treats staff fairly and respectfully. - 11b (Strongly Disagree - Strongly Agree): I feel that my supervisor promotes a culture of openness and integrity. - 12 (Strongly Disagree - Strongly Agree): I am aware of the avenues for reporting disputes at the Fund. - 13 (Strongly Disagree - Strongly Agree): I am confident that the avenues of dispute resolution at the Fund are effective at handling employees’ disputes. - 14* (Strongly Disagree - Strongly Agree): I feel policies and procedures are applied the same way to all staff regardless of age, creed, disability, educational background, ethnicity, gender, gender expression, nationality, race, religious beliefs, or sexual orientation. - 15 (Strongly Disagree - Strongly Agree): I feel the institution provides a thorough response in addressing disputes and ethical concerns. - 16 (Strongly Disagree - Strongly Agree): I trust the effectiveness of the integrity hotline. - 17i (Yes - No): In the past 5 years, I have OBSERVED the following incidents: Sexual Harassment - 17ii (Yes - No): In the past 5 years, I have OBSERVED the following incidents: Bullying/Intimidation - 17iii (Yes - No): In the past 5 years, I have OBSERVED the following incidents: Discrimination - 17b (Open-Text): Please share more details with regards to your response to Question 17 - 18i (Yes - No): In the past 5 years, I have EXPERIENCED the following incidents: (Sexual Harassment item label omitted in source listing) - 18ii (Yes - No): In the past 5 years, I have EXPERIENCED the following incidents: Bullying/Intimidation - 18iii (Yes - No): In the past 5 years, I have EXPERIENCED the following incidents: Discrimination - 18 (Open-Text): Please share more details with regards to your response to Question 18 - 19a (Yes - No): In the instances where you responded "Yes" to the questions 17 and 18, did you report the incident? Please respond N/A or skip this question if you responded "No" to questions 17 or 18. - 19b (Open-Text): Please share more details with regards to your response to question 19. - 19 (Yes) (Yes - No): If you indicated "Yes" to Question 19 and reported the incident/s. Were you satisfied with the Fund’s response? - 19 (No) (Multiple Select, Select all that apply): - a. I didn’t know whom to contact - b. I didn’t believe corrective action would be taken - c. I didn’t want to be known as a whistle-blower - d. I didn’t trust the organization to keep my report confidential - e. My co-workers would react negatively to me - f. Managers would react negatively to me - g. I wasn’t sure if it was really harassment/bullying/discrimination - h. I didn’t think it would be resolved in a fair and impartial way - i. I dealt with it informally - j. I was afraid of retaliation - k. I was not aware of any protection against retaliation - 20 (Open-Text): Do you have any recommendations on how to improve the Fund’s dispute resolution system? - 21 (Open-Text): Do you have any recommendations on how to improve the Fund’s ethics and integrity services? - 22 (Open-Text): Do you have any recommendations on preventing disputes at the Fund? - 23 (Open-Text): Do you have any recommendations to improve safeguards around data and analytical integrity at the IMF? --- ### Appendix IV. Status of Recommendations of the 2001 and 2013 Reviews of Fund’s DRS ### Overview of review status up to 31 December 2021 - The current Panel of Experts, with the assistance of HRD, LEG and OIA, reviewed the status of all the recommendations up to 31 December 2021: the pending recommendations from the 2001 review and the seven recommendations of the 2013 review. - Of the remaining third of the recommendations made in the 2001 Report, over sixty percent of the recommendations have now been implemented in full or in part. - Reasons for non-implementation of some recommendations: - conversion of the relevant GAOs to the new Staff Handbook published in 2016 - provisions already existed - the Administrative Tribunal had already passed judgement on those issues ### Status of the seven recommendations from the 2013 report (items 44–50) - 44. Recommendation 1: - HRD did not implement a specific communication strategy with respect to the DRS. - HRD regularly engages in strategic communication initiatives related to the DRS. - Examples: - In 2017 a new DRS website was set up in consultation with the SAC and the Mediation Office. - In 2018 HRD launched a webpage on Addressing Allegations of Harassment and Discrimination. - In 2019 HRD launched a performance support intranet page, which advises managers that they can also use DRS services for advice on approaching performance issues of their team members. - 45. Recommendation 2: - In 2019, the Fund strengthened and updated its Retaliation Policy. - Managers and supervisors are responsible for creating an atmosphere where staff feel free to use the DRS. - Managers have a duty to act on, report, and ideally, resolve ethical concerns that come to their attention. - An Independent Review process to address employees' concerns about retaliation was established. - Any Fund official, except the Ombuds Office and the Office of the Mediator, who receives a retaliation complaint is required to advise the complainant to submit the complaint to the Office of Internal Investigations (OII) for Independent Review. - This review is conducted on a short timeline of 45 days, and is to determine whether there is clear and convincing evidence that the adverse action would have occurred for separate and legitimate reasons, absent the protected activity. - 46. Recommendation 3: - Administrative Review annual reports have been issued since 2013 and are available on the Administrative Review intranet. - There have been no updates to the intranet site since 2018, due to a heavy caseload, a downsizing of the department and the changes in working due to pandemic. - 47. Recommendation 4: - Management did not seek to establish a separate oversight function for the DRS citing a need to balance accountability with the independence of the DRS bodies. - DRS office heads have periodic meetings with management and with the D-HRD to discuss the operation of their offices. - 48. Recommendation 5: - The DRS intranet page provides a basic explanation of the administrative review procedure. - In 2016, HRD developed detailed procedural guidelines for the conduct of administrative reviews. - The guidelines have not been published for staff as yet, but all relevant HRD staff are introduced to it. - 49. Recommendation 6: - GAO No. 31 was revised in 2016 and it is now incorporated into the Staff Handbook in Chapter 11.03, Section 5. - The section sets out the process of the Grievance Committee, as well as the jurisdiction of the Committee. - The Committee publishes redacted recommendations and case summaries on its internal webpage, and has developed a protocol on the principles and procedures which guides requests for production of records (electronic and/or hard copy) in its proceedings, which is made available on the Committee’s intranet site. - 50. Recommendation 7: - As part of the revision of GAO No. 31 in 2016, language was introduced to clarify that any party to a grievance, can request the MD to overrule or deviate from the Committee’s recommendations. - Such a request must be provided to all parties who have received the Committee’s report, i.e.: the MD, D-HRD, and the grievant. ### Additional notes on two low-impact recommendations from the 2013 report - Extension of the initial appointment term of the Ombudsperson to five years with one renewal: - The Ombudsperson’s tenure is now initially 2 years, renewable for an additional term of 5 years, for a maximum of 7 years. - Suspension of time limits for Administrative Review and Grievance Committee processes while a complaint on an alleged misconduct is pending with the OII: - Practice has been to recommend that staff file a request for Administrative Review at or around the same time as their report of alleged misconduct to OII. - This protects staff’s position in terms of timeliness, as the D-HRD will wait for the outcome of the investigation before proceeding. *Source: Appendix III and Appendix IV from ppea2022032 - Appendix III. Survey Questionnaire* --- _Source: https://www.imf.org/-/media/files/publications/pp/2022/english/ppea2022032.pdf_