Environment & Social

Good Framework for IPF

Practice Operations
Note
Third-Party
Monitoring
First Edition
Published June 2018

Afshan Khawaja (OPSES) and Anne-Katrin Arnold (OPSES) led the overall preparation of this Good Practice
Note with a team consisting of Leila Chennoufi (Sustainability and Environment Consultant), Elizabeth Smith
(OPSES), and Colin Scott (OPSES).

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Abbreviations

CSO Civil Society Organization

EHSGs World Bank Group Environmental, Health and Safety Guidelines
E&S Environmental and social
ESCP Environmental and Social Commitment Plan
ESF Environmental and Social Framework
ESMP Environmental and Social Management Plan
ESP Environmental and Social Policy
ESS Environmental and Social Standard
FCV Fragility, Conflict, and Violence
GIIP Good International Industry Practice
GPN Good Practice Notes
IBRD International Bank for Reconstruction and Development
IPF Investment Project Financing
IDA International Development Association
NGO Non-Governmental Organization
OHS Occupational Health and Safety
PIU Project Implementation Unit
RAP Resettlement Action Plan
SEP Stakeholder Engagement Plan
PDO Project Development Objective
TORs Terms of Reference
TPM Third-Party Monitoring

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Glossary

Expert/Specialist: A person or firm with the necessary combination of skills,

education and experience to investigate, assess, summarize and
make recommendations on a particular topic or scope of work. An
expert or specialist team should include individuals familiar with
the local context, as well as individuals knowledgeable about
World Bank requirements.
Independent Expert/Specialist: An expert or specialist individual or firm that is able to provide
professional, objective, and impartial advice, without
consideration of future work, and avoiding conflicts with other
assignments or their own business or personal interests. Such
independence supports the objectivity of the environmental and
social assessment, without regard to vested interests and without
reason to influence the outcome of the assessment. In certain
circumstances where the specialist has been involved in the
preparation, design, and implementation of the project (for
example, early feasibility studies), they may still be engaged in
conducting the assessment if the Borrower can demonstrate to
the satisfaction of the Bank that there is no conflict of interest,
and that to engage such a specialist would be of benefit for the
assessment.
Internationally recognized An individual or firm that demonstrates education and
independent expert: experience expected of a senior-level specialist in the particular
field, depending on the characteristics needed for the works. The
person may have certifications and may be an active member of
a relevant professional organization and have documented
knowledge in the field.
Third-party Monitoring (TPM): TPM refers to (i) an approach to smart supervision whereby the
Bank contracts an independent agent to verify that project
implementation by the Borrower complies with the provision of
the financing agreement and that the environmental and social
performance of the project meets the agreed standards; and (ii)
an approach to project implementation whereby the Borrower
contracts third parties to strengthen monitoring and evaluation
systems and obtain additional data on the achievement of
progress development. When TPM is used for Bank supervision,
the Bank maintains its own supervision obligations, but may
transfer the implementation of the monitoring to an agent.
Third party: A third party is a party external to the project, who is neither a
direct beneficiary of the project nor part of the project’s
management structure. Typically, third parties come from non-
governmental organizations (NGOs), academia, aid organizations,
United Nations agencies or private firms. For the purpose of this
GPN, third parties are either experts/specialists with specific,
project-relevant expertise, or other stakeholders that monitor
specific aspects of a project’s performance.

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 Good Practice Note – Third-party monitoring in the context of the ESF

Contents

1. Introduction ....................................................................................................................... 2
Environmental and Social Framework ...................................................................................................... 2
Third-party Monitoring (TPM) .................................................................................................................... 2
2. The TPM process for project implementation by the Borrower ........................................ 4
Step 1: Determine if TPM is advisable ...................................................................................................... 4
Initial decision ........................................................................................................................................ 4
Project characteristics ........................................................................................................................... 5
Key benefits and challenges ................................................................................................................. 6
The Bank’s role ..................................................................................................................................... 7
Step 2: Determine scope and develop TOR ............................................................................................. 8
Scope .................................................................................................................................................... 8
Terms of Reference............................................................................................................................... 9
Step 3: Select and contract third-party monitors ..................................................................................... 10
External experts .................................................................................................................................. 10
Individuals vs. firms ............................................................................................................................. 10
Independence from project preparation .............................................................................................. 12
Independence of third parties .............................................................................................................. 13
Procurement ........................................................................................................................................ 14
Confidentiality ...................................................................................................................................... 14
Step 4: Manage the TPM program .......................................................................................................... 15
Effective management......................................................................................................................... 15
Changing commitments....................................................................................................................... 15
Frequency of monitoring...................................................................................................................... 15
Step 5: Reporting and transparency ....................................................................................................... 16
Documenting findings and results ....................................................................................................... 16
Transparency and confidentiality ........................................................................................................ 16
3. When the Bank contracts TPM Directly for Smart Supervision .......................................17
Bank’s TPM activities .............................................................................................................................. 17
Capacity or specific skills required .......................................................................................................... 18
Coordination ............................................................................................................................................ 18
Funding when TPM is on behalf of the Bank .......................................................................................... 19
ANNEX 1: Resources ..............................................................................................................20
ANNEX 2: Template TORs for third-party monitoring...........................................................20

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 Good Practice Note – Third-party monitoring in the context of the ESF

1. Introduction

Environmental and Social Framework

Under the Environmental and Social Framework (ESF), the World Bank provides multiple entry points for
engaging third-party to (i) support Borrowers in carrying out project implementation through better
monitoring and (ii) support the Bank in fulfilling implementation support duties. On the Borrower side,
involving stakeholders and third parties in project
implementation is intended to improve monitoring Box 1: World Bank’s Good Practice Notes
and progress towards the project development
objective (PDO), including in situations where the The World Bank is providing a series of Good
Borrower has limited capacity to assess and manage Practice Notes (GPN) to accompany the ESF to
support its implementation. This note focuses on
environmental and social risk or in situations of
third-party monitoring to improve Borrower
fragility, conflict, and violence (FCV) where access to
capacity in IPF. The GPN have been developed in
project sites is limited due to security concerns. partnership with specialist advisers from inside
This good practice note offers a step-by-step and outside the Bank and are designed to be
approach for Bank staff to assist Borrowers in reviewed and updated periodically, when
establishing third-party monitoring (TPM) for project appropriate. The note should be read in
implementation. The information may also be useful conjunction with the ESF, including the Policy, the
Environmental and Social Standards (ESS1-10) and
for Borrowers who wish to benefit proactively from
the accompanying Guidance Notes.
TPM to improve project performance, in cases where
the use of TPM has not been required. The scope of
the note is therefore focused on cases where TPM is primarily used to assist the Borrower.

Third-party Monitoring (TPM)

The goal of using third parties to assess the status and performance of a project, its compliance status,
or emerging issues through a specialized party is to provide an unbiased perspective on the issue and
status, and to make recommendations for improvement, where relevant. TPM is used widely in technical
and engineering projects, physical infrastructure, financial or procurement compliance, governance and
accountability, and environmental and social monitoring of project implementation. Reviews 1 of the
effectiveness of TPM of development projects during their implementation have highlighted the positive
impact on project performance and, ultimately, its development impact.
Borrowers may engage TPM to complement their own capacity for project monitoring. The Bank’s
Environmental and Social Standards (ESSs) include several requirements for TPM to be engaged by the
Borrower to complement Borrower expertise. As such, TPM in the context of the ESSs focuses on (1) the
role of third-party specialists in the Borrower’s implementation of a Bank-financed project, and (2) the

1
See Annex 1 for resources and examples: “External monitoring of the Chad-Cameroon pipeline projects,” International Finance
Corporation, September 2006; “Third Party Monitoring Programme for the Afghanistan Reconstruction Trust Fund: A Review,”
World Bank, 2014.

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 Good Practice Note – Third-party monitoring in the context of the ESF

role of stakeholders, including from civil society, to complement or verify the Borrower’s own monitoring
activities.
TPM may have a different focus if it is engaged directly by the Bank to complement the Bank’s own
ability to monitor projects in situations where the project may be difficult to access. In such cases, TPM
promotes “Smart Supervision” by enhancing the Bank’s presence in the field and getting “eyes and ears
on the ground” when World Bank staff are unable to do so directly 2 due to high levels of security concerns.
Furthermore, in such cases, TPM providers are contracted through Corporate Procurement. Through this
“Smart Implementation” approach 3, Borrowers can benefit from additional support and expertise from
experts in monitoring particular environmental and social issues or an overall program. Figure 1 illustrates
the relationship between Bank, Borrower, and TPM.

Figure 1. Forms of TPM in relation to Bank, Borrower, and project

2
See FCV Group (forthcoming Operational Note) “Approaches to Smart Supervision in Insecure Areas: Third-Party
Monitoring and Beyond.”
3
See FCV Group (forthcoming Operations Note).

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 Good Practice Note – Third-party monitoring in the context of the ESF

2. The Third-party monitoring process for project

implementation by the Borrower

Step 1: Determine if TPM is advisable

Initial decision
The TPM process begins with a decision on whether TPM is required or at least advisable. The Bank will
identify the need for TPM as early as possible during project preparation and appraisal. The requirement
will be included in the ESCP, which is part of the legal agreement. When unforeseen issues arise following
the agreement of the ESCP, TPM may need to review recent information or performance, such as follow-
up to a major incident or accident.
The Bank’s due diligence is to require the Borrower to engage TPM where appropriate and to require
the Borrower to collaborate with third parties to establish and monitor agreed mitigation measures.
When the Bank engages TPM, this decision will depend on the accessibility of the project to Bank
supervision and the Borrower’s capacity to monitor the project (see Section 3 for more details).
The ESF includes specific requirements for the kinds of projects and the kinds of issues that require TPM
to support implementation of the environmental and social risk management aspects of the project.
Generally, complex and contentious projects may need a higher degree of involvement by a third party.
Bank staff will assess each project and advise the Borrower or other partners on the requirements, the
scope of work, action plans, and monitoring and reporting arrangements that involve third-party. Table 1
summarizes the requirements for TPM in the ESSs. 4

Table 1. ESF summarized commitments regarding monitoring and independent expertise in

ESS 1-10

ESS1. Assessment and Management of Environmental and Social Risks and Impacts

• Engage one or more internationally recognized independent experts for projects that
are High Risk or contentious, or that involve serious multidimensional environmental
or social risks or impacts (for example, in the form of an advisory panel), and identify
the third parties in the Environmental and Social Commitment Plan (ESCP).
• Engage stakeholders and third parties, such as independent experts, local
communities, or civil society organizations (CSOs), to complement or verify the
Borrower’s own monitoring activities and collaborate with such agencies and third-
party.

4
The ESF also includes references to third parties in other roles, including as independent specialist to carry out the environmental
and social assessment (ESS1), as employers of project workers (ESS2), as professionals engaged in the design of structural
elements (ESS4), as experts consulted with when assessing biodiversity baseline conditions or to assess whether an offset is
feasible (ESS6), as experts consulted with when assessing cultural heritage sites (ESS8), or as experts supporting the Borrower’s
stakeholder identification (ESS10). These roles of third parties are not addressed in this GPN, as they do not relate solely to
monitoring.

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 Good Practice Note – Third-party monitoring in the context of the ESF

ESS4. Community Health and Safety

• Engage separate independent experts with relevant and recognized experience when
structural elements or components of a project are situated in high-risk locations,
including those with risk of extreme weather or slow onset events, and their failure or
malfunction may threaten the safety of communities to conduct a review as early as
possible in project development and throughout the stages of project design,
construction, operation, and decommissioning.
• Contract experienced and competent professionals for the supervision of the design
and construction of dams, provide administrative support for its activities, and report
on the panel’s conclusions and recommendations.

ESS5. Land Acquisition, Restrictions on Land Use and Involuntary Resettlement

• Retain competent resettlement professionals for all projects with significant

involuntary resettlement impacts to monitor the implementation of resettlement
plans, design corrective actions as necessary, provide advice on compliance with this
ESS, and produce periodic monitoring reports.
• Commission an external completion audit of the resettlement plan for all projects
with significant involuntary resettlement impacts when all mitigation measures have
been substantially completed, undertaken by competent resettlement professionals.
• Make arrangements for monitoring of displacement and resettlement activities by the
implementing agency, supplemented by third-party monitors.

Project characteristics
The decision to require TPM will take into account the specific requirements of the ESSs, the specific
nature and extent of the risks and impacts of the project, the complexity of the project, any stakeholder
concerns, and Borrower capacity to implement and monitor the project. Box 1 provides examples of other
project characteristics that may benefit from TPM.

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 Good Practice Note – Third-party monitoring in the context of the ESF

Box 1. Project characteristics that may benefit from TPM

• Potential impacts to endangered species of flora or fauna, needing specialized expertise
in that species
• Certification or verification of performance or results, such as independent auditing
• Labor force size and relationship to the local area
• Labor unrest requiring regular monitoring by independent specialist
• Significant number of grievances, requiring independent review
• Health and safety incident requiring expert advice on mitigation
• Cultural heritage discovered during excavation works (requiring anthropologist or
archeologist)
• Independent biodiversity expert to review implementation of biodiversity action plan
and make recommendations for adaptive management
• Allegations of gender-based violence or discrimination, requiring independent
specialist or specialist organization
• Community monitoring of benefits or impacts
• Ability to reach project sites, due to security concerns or other restrictions.
• Risk category for the Project
• Capacity of the Borrower and/or Project Implementation Unit to monitor the
environmental and social risks and impacts of the Project
• Amount of resettlement and livelihood restoration required

Key benefits and challenges

When deciding whether to engage third-party monitors, benefits and challenges should be considered
(see Table 2).

Table 2. Benefits and challenges of TPM

Benefits Challenges

Independent verification of information Bias

Where the Borrower has internal monitoring and Some third parties may have particular advocacy
reporting mechanisms in place, TPM allows positions on certain project-relevant issues, such
verification of the appropriateness of measures positions should try to be identified prior to being
for managing particular issues and impacts, and selected for the work to be undertaken. In some
for evaluating the implementation of cases, regardless of these views, expert
environmental and social (E&S) commitments, knowledge can make the third party an asset to
identifying strengths and weaknesses and the work, such as a health CSO with detailed
recommending improvements in order to meet information about health issues in the project
project objectives and/or project E&S area, or a zoologist with particular expertise on
requirements. an endangered species in the project area.
However, if a more neutral perspective is

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 Good Practice Note – Third-party monitoring in the context of the ESF

needed, a strong actual or perceived bias can

significantly influence outcomes of the work
being undertaken. Selection of appropriate third-
party monitors is one of the most important
factors in the credibility of the outcomes and a
particular position or bias that may be inherent in
the work being undertaken by the third-party
monitors, should be acknowledged early in the
monitoring report.

Capacity building and implementation support Understanding of project

In the context of development, with situations A third party is usually not going to be as
where capacity gaps are observed (for example, knowledgeable about the Project as the Borrower
in remote project areas, or in new or emerging or the Bank. It is critical to brief the third-party
expertise), repeated exposure to qualified third- monitors adequately and provide them with
party experts plays a key capacity-building role, relevant contacts, documentation, and support,
whether it is an intended goal or not. The TPM to encourage realistic recommendations that can
process may contribute to a significant lead to improvements in the project, where
understanding of the benefit of external experts, appropriate.
both through the informal sharing of knowledge
and information and the recommendation of
improvements to the project’s E&S performance.

Increased credibility and trust

The presence of a third-party monitor who is
independent of the Borrower may improve the
level of trust of project-affected parties and the
credibility of findings or summary of findings that
may be released into the public domain.

The Bank’s role

The Bank will identify the need for TPM as early as possible during project preparation and appraisal.
The requirement will be included in the ESCP, which is part of the legal agreement. When unforeseen
issues arise following the agreement of the ESCP, TPM may need to review recent information or
performance, such as follow-up to a major incident or accident. The Bank’s due diligence is to require
the Borrower to engage TPM where appropriate and to require the Borrower to collaborate with third
parties to establish and monitor such mitigation measures.

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 Good Practice Note – Third-party monitoring in the context of the ESF

ESP paragraph 58

“Where appropriate and as set out in the ESCP, the Bank will require the
Borrower to engage stakeholders and third parties, such as independent experts,
local communities or nongovernmental organizations (CSOs), to complement or
verify project monitoring information. Where other agencies or third parties are
responsible for managing specific risks and impacts and implementing mitigation
measures, the Bank will require the Borrower to collaborate with such agencies
and third parties to establish and monitor such mitigation measures.”

Step 2: Determine scope and develop TOR

Scope
For the purpose of this GPN, the scope of TPM is always related to environmental and social risks and
impacts of a project. The scope of TPM may be general (for example, monitor compliance with the ESSs
and ESCP), specific (for example, conduct biodiversity compliance audit) or medium to long-term (for
example, monitor the implementation of a resettlement action plan over a number of years, see Box 2).
The frequency of monitoring and the schedule of site visits depend on a number of variables, including
the stage of the project in the project cycle, the project’s complexity, impacts, and any issues that might
arise during implementation.

Box 2: Typical TPM activities include

• Reviewing ESCP implementation status and compliance with the ESSs.
• Tracking environmental and social performance.
• Monitoring contractor or supply chain compliance.
• Verifying compliance and progress on project commitments.
• Reviewing stakeholder engagement and grievance management.
• Undertaking site visits to review documents and meet with workers,
management, and stakeholders.
• Identifying corrective and preventive actions as needed and assisting the
Borrower to incorporate these in an amended ESCP or relevant management
tool, in a manner acceptable to the Bank.
• Providing information for the Borrower to disclose to stakeholders, showing
performance of the project or implementation of commitments.

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 Good Practice Note – Third-party monitoring in the context of the ESF

Terms of Reference
The Borrower determines and agrees with the Bank the content
of the Terms of Reference (TORs), which reflects the scope of
the TPM. The Bank will provide input on the scope of the TORs TPM is not a substitute for the
to enable the assignment to meet the commitments established Borrower’s own internal
in the ESCP. Based on the scope of the monitoring to be monitoring program, but is
undertaken, the Bank assesses whether one expert or a firm is designed to complement
needed, or whether a number of individual experts are needed and/or verify what it has done,
on specific issues, in which case, there might be several smaller depending on the objectives
TORs. The TORs are prepared by the Borrower and agreed with and needs of the monitoring
the Bank. A TOR template is provided in Annex 2. activities.

The TORs should include the scope of the monitoring

assignment, the number of locations and sites to visit, the frequency of the monitoring, the budget and
timing of the assignment, and the type and skill sets required of third-party monitors. The TORs should
clearly identify reporting lines, roles and responsibilities of the different parties involved in the project.
Where third-party monitors are not experienced in monitoring, such as some CSOs or individuals, the
scope of work should include measures for relevant capacity building.
The frequency of monitoring necessary will be linked to the specific risks and impacts of the project and
the Borrower’s performance during implementation. For projects that include TPM throughout the entire
project implementation phase, the TORs should clarify whether monitoring frequency varies throughout
the project cycle. For example, there may be more health and safety monitoring needed during a high-
risk construction period, and less during operational phases.

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 Good Practice Note – Third-party monitoring in the context of the ESF

Step 3: Select and contract third-party monitors

External experts
The Bank will determine whether third parties are needed in monitoring the risks and impacts of a
project. Depending on the project, required third parties may be specialists on a particular issue (for
example, endangered species or biodiversity, or a stakeholder engagement specialist) or a team of people
to conduct a monitoring assignment. The requirement for an external expert or specialist will be included
in the ESCP. The Bank will agree the scope of the monitoring to be undertaken with the Borrower and the
selection of the third party. When monitoring reports are prepared, drafts will be sent to the Bank at the
same time as the Borrower/implementing agency.
The use of TPM can range from the Borrower contracting one or more individual experts, to involving
specialized CSOs, universities or think-tanks, consulting firms, or other qualified entities. The Bank will
advise the Borrower on the type of third-party that would be preferable for the particular scope of work.
Where international experts or firms are contracted, it is good practice for them to partner with local
experts to increase local capacity and ensure that the local concerns and issues are taken into account.
Error! Reference source not found. shows potential issues associated with different types of third-party
monitors.

Individuals vs. firms

Table 3. Benefits and challenges for TPM conducted by individuals compared to firms

Type of TPM Benefits Challenges

Individuals Individual experts or specialists can be Individuals may have other clients and
useful if the scope of work is limited or not be as available in the time needed,
focuses on a particular issue, such as and may be less likely to possess the
labor, health and safety, or a particular skills and resources available at a firm.
species of plant or animal that may be They may also not have liability
affected by a project. Individuals can be insurance if there are significant
less costly than consulting firms. quality problems in the work
undertaken.

Consulting firms Firms may have better quality control A consulting firm is likely to be more
than individual experts and can expensive than individual specialists or
increase staffing or support individual experts and may be more time
consultants with additional expertise or consuming to hire. Additionally, a
resources to meet the agreed scope of consulting firm that has been involved
work. It is important to agree in in the preparation of the project and
advance which individual employees of design of the action plans should not
the firm will undertake the work and monitor the project. Monitoring work
that these employees are not switched
out during the work, unless the

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 Good Practice Note – Third-party monitoring in the context of the ESF

Table 3. Benefits and challenges for TPM conducted by individuals compared to firms

Type of TPM Benefits Challenges

substitutes have comparable expertise that they helped to develop
and seniority and have submitted their constitutes a conflict of interest.
CVs for approval. A consulting firm
may provide a broader perspective and
be more flexible to meet the project’s
timing needs.

Academics and If information and advice on a specific Academics and think tanks may act as
think tanks methodology or topic is needed, some individuals or consulting firms, but
academics or think tanks can be they may not have the breadth of
contracted to undertake a limited knowledge necessary for the entire
scope of work. An example would be scope of work to be undertaken. With
hiring an energy efficiency think tank to this type of contractor, it is very
monitor the implementation of a important to understand their
greenhouse gas accounting experience with the application of the
methodology and make issues in the TORs at the project level,
recommendations for improvement. and not just at the theoretical level.
Some academics or think tanks may
have staked out certain positions on
issues related to the project in
presentations or publications. These
views may need to be understood to
ensure there is no perceived bias on
project-relevant issues. It is also
important to determine whether they
may have an obligation or intent to
publish in relation to their work on the
project, and to take any appropriate
measures to protect confidentiality
and provide neutrality in the
monitoring, if that is the case.

CSOs Some CSOs may be well equipped for Some CSOs may not be able to agree to
TPM and may include experts on confidentiality agreements and, similar
specific issues. It is particularly to the point made above, may have an
important to review the CVs of the CSO obligation or intent to publish in
members that would undertake the relation to their work on the project.
work to make sure they have the skills Therefore, it is important to
and experience necessary. In some understand any limitations regarding
cases, CSOs are well placed to confidentiality if the scope of work
participate in monitoring activities and includes confidential information (for
have the education and expertise example, worker health and safety

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 Good Practice Note – Third-party monitoring in the context of the ESF

Table 3. Benefits and challenges for TPM conducted by individuals compared to firms

Type of TPM Benefits Challenges

necessary to make recommendations records). It is also important to
in line with good international practice. understand potential bias and funding
of the group to understand and
confirm the neutrality of their
approach to the scope of work. Some
CSOs are volunteers and it would be
important to understand how
timetables will be met, quality control
on reporting will be handled, and
transparency limitations.

Community Community monitoring is different Community monitoring may not have

monitoring from other types of monitoring the same accountability as a
activities. Community members may be contractual relationship with an
affected stakeholders and have an individual expert or specialist, and
interest in the project outcomes. They therefore it may be more challenging
are often volunteers and may have a to meet timing requirements and
variety of skills and expertise. The quality control. Sometimes the benefit
community playing a part in of community monitoring goes to the
monitoring, for example, grievances, or community as a whole. This may mean
the implementation of the stakeholder that individuals working on the
engagement plan, can be a tool to monitoring may change without much
improve performance of these plans notice, and that enough capacity
and programs, and the knowledge building needs to be included in the
about the community and the groups scope of work to enable the
within it are normally far better than community members to understand
that of a consulting firm or an what needs to be done, and that new
individual expert. The ability of people coming in the middle of the
community monitoring to be effective work can be trained. A local
can depend largely on the individual community may not have the
contact points managing the scope of knowledge needed about international
work, and the capacity building good practice, or the specific expertise
provided. needed. Because more input is often
needed by the contracting party, this is
not as independent a perspective on
project implementation as some of the
other formats.

Independence from project preparation

To be effective in supporting monitoring and implementation of Bank-financed projects, third parties
should be independent from project preparation (including from the Bank, the Borrower, or the

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 Good Practice Note – Third-party monitoring in the context of the ESF

implementing agency and its contractors) and should not have had a previous role in the project (with the
exception of a previous monitoring role). Their status should be reviewed to avoid conflicts of interest,
and they should maintain objectivity throughout the process, so that findings and conclusions are based
on evidence. Third-party monitors should also be ethical, reflecting integrity, confidentiality, trust, and
discretion. They should be fair, truthful, and accurate in reporting. Monitors should also be competent,
with the expertise and experience necessary to ensure due professional care in the conduct of work
undertaken. For high risk or contentious projects, the Bank may require the Borrower to engage one or
more internationally recognized independent experts to provide advice and oversight to the project.

Box 3. Using civil society organizations to monitor projects in conflict-affected

provinces of the Philippines
“Under the Philippines Mindanao Reconstruction and Development Project,
communities in conflict-affected areas, internally displaced persons, and rebel
returnees decide on, plan, and implement subprojects in order to restore their
access to basic services. The subprojects are scattered over remote and conflicted
areas where World Bank staff cannot travel. Therefore, the project is working with
two CSOs to monitor project components that cannot otherwise be monitored by
the Bank. The CSOs’ local knowledge (including local languages) makes monitoring
possible.”
Source: “How-to-Notes: Participatory and Third-Party Monitoring in World Bank
Financed Projects: What Can Non-State Actors Do?” World Bank Social
Development Department, 2013.

Independence of third parties

Third parties that are hired by the Borrower are not completely independent, as they are managed by
the contracting party and paid by them. It is important that their reporting line be such that they are able
to raise concerns and make recommendations without interference, and that these views can then be
discussed with the Bank and the Borrower. The TORs for the work and the CVs of experts must be
satisfactory to the Bank and the Bank should be aware of any conflicts of interest prior to agreeing for the
work to proceed. The Bank should receive the draft TPM report no later than when it is received by the
contracting agency and dual accountability of the TPM providers can be established in the preparation
and appraisal stages.
It is only by identifying bias and ensuring strict separation of conflicts of interest that the TPM
assignment can be credible to authorities or to stakeholders. It is difficult for third parties to be
completely independent, given the need for access to information and costs associated with the work,
but efforts can be made to be as independent as possible 5. Third parties may need to actively build
credibility through demonstrating trustworthiness in the quality of their work and engagement with
various stakeholders 6.

5
“How to Note: Participatory and Third Party Monitoring in World Bank Financed Projects: What Can Non-State Actors Do?”
World Bank Social Development Department, 2013.
6
“Peru LNG: A focus on continuous improvement, Lessons of Experience.” International Finance Corporation, Washington,
DC, March 2013.

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 Good Practice Note – Third-party monitoring in the context of the ESF

Procurement
The World Bank’s Procurement Regulations 7 for IPF Borrowers clarify the various procurement options,
and cover topics such as governance, procurement provisions, and acceptable methods for selection of
services. The regulations vary according to the specific factors including procurement risk and contract
risk and other rules applicable to each specific project as outlined in the Project Procurement Strategy for
Development and the Project Procurement Plan.
The Bank’s task team will support the Borrower in selecting the appropriate procurement approach. The
Borrower will consider the availability of key knowledge, language and expertise locally and
internationally, as well as the complexity and magnitude of monitoring activities. The Borrower will make
staff available to manage the call for proposals, selection processes, interfaces and monitoring contracts,
following applicable World Bank procurement rules. It is good practice to link payments to outputs in the
contract, so that some leverage is retained, and that full payment is not made until reports are of
satisfactory quality.

Confidentiality
Contracting should include relevant requirements on personal data privacy and confidentiality, as
appropriate, and in accordance with procurement requirements. The Bank should bring the issue of
confidentiality to the Borrower’s attention if, in undertaking an assessment, the third party would have
access to proprietary information. In such cases, the third party may need to sign a confidentiality
agreement (for example, if they will have access to confidential information such as personnel records
regarding labor, accident reports, and so forth).
Some third parties, such as community-based organizations and CSOs, may have limitations on the type
of confidentiality to which they can agree. The Borrower will take confidentiality needs into account
when selecting a third party as well as the sensitivity of the assignment. If confidentiality is required, and
cannot be ensured by the potential TPM partner, the type of partner should be revisited. For example, a
specialist contracted to monitor allegations of gender-based violence may have access to sensitive
personal information that would be detrimental to the individual or group if it were not kept confidential.
Similarly, individual amounts received under resettlement agreements would not be public and
monitoring of labor issues may involve personnel information that is confidential. In certain
circumstances, when confidentiality is a concern, monitoring may be best managed under contracts with
individuals, firms, or institutions.

7
https://policies.worldbank.org/sites/ppf3/PPFDocuments/Forms/DispPage.aspx?docid=7398246c-6904-4546-9313-
4dd7a8f93faa&ver=current

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 Good Practice Note – Third-party monitoring in the context of the ESF

Step 4: Manage the TPM program

Effective management
For effective management of the TPM, the Bank task team should help the Borrower to:
a. Mobilize Borrower management support for TPM and provide a TPM point of contact.
Management support is important to enable timely transmittal of information, access to project
sites, logistical support in setting up site visits, and circulation of findings and recommendations to
relevant levels of the organization.
b. Review draft monitoring reports in a timely fashion to ensure there are no factual errors and share
drafts with the World Bank’s task team.
c. Discuss recommended measures or propose alternative solutions to address concerns raised.
d. Provide a plan of action to implement recommendations in a timely and cost-effective manner to
show progress until the issue/action is resolved. Propose updates to the ESCP or other action
plans with the changes agreed.
e. Disclose updates to the ESCP that are relevant to TPM, particularly if any stakeholders are
affected by the changes.
f. Update internal monitoring plans to include any changes agreed and include in future reporting
to internal management and World Bank as applicable.
g. Ensure final report is shared with relevant agencies and stakeholders, as applicable.

Changing commitments
When a third party makes a recommendation that would require changing existing commitments
between the Borrower and the Bank, these changes need to be agreed between the Borrower and the
Bank. For example, issues may be raised during monitoring or by events, such as accidents or incidents,
that require additional actions or monitoring. If changes need to be made, the World Bank environmental
or social specialists and legal counsel assigned to the project should be involved in the discussion.

Frequency of monitoring
If there are incidents during implementation that increase the risk of the project, the frequency of
monitoring may also be increased or additional capacity in expertise may need to be adjusted. For
example, a high rate of occupational safety accidents during project implementation may require a health
and safety expert to assess the accidents and develop an appropriate action plan and monitor its
implementation.

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 Good Practice Note – Third-party monitoring in the context of the ESF

Step 5: Reporting and transparency

Documenting findings and results
TPM results are documented and recorded, along with the evidence that supports the findings and
results of the activities. Recommendations are made, where appropriate, to propose updates to
commitments or actions, including increasing or decreasing the level of monitoring, where appropriate
(for example, more intensive monitoring may be needed at certain phases of project implementation,
such as during construction).

Transparency and confidentiality

The Borrower is responsible for transparency with regard to project information. In addition, the Bank
has its own disclosure of information requirements for projects. The TPM TORs should be explicit about
these roles and responsibilities. The third-party monitor will provide reporting on the assignment directly
to the Borrower and the Bank, and will not disclose information beyond those parties unless the contract
specifically requires it. Transparency and confidentiality requirements should be specified in the contract.
The Bank should discuss with the Borrower the benefits of increased transparency and the need to provide
information to stakeholders, in accordance with ESS10 and the publicly disclosed Stakeholder
Engagement Plan for the project.

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 Good Practice Note – Third-party monitoring in the context of the ESF
3. When the Bank contracts TPM Directly for Smart Supervision

Bank’s TPM activities

According to ongoing work carried out by the FCV Group, as of 2018, the Bank has elicited 16 contracts
(active and closed) for TPM in seven FCV-affected countries (Afghanistan, Cameroon, Iraq, Pakistan,
Somalia, South Sudan, and Yemen) totaling US$51.5 million. These contracts had different objectives
that fell into three categories: to (a) perform fiduciary oversight; (b) control infrastructure quality; and (iii)
monitor social and environmental risks, especially gender-based violence. In these cases, the contract is
with the Bank and the duty of care is to the Bank.

Box 4: TPM in an active conflict zone

The CEMAC Trade and Transport Facilitation project is a US$655 million regional operation
focused on improving transport conditions along the Douala-N’Djamena and Douala-Bangui
corridors. Since early 2015, North Cameroon—the country’s poorest region—has been an
active conflict zone. In two-and-a-half years, Boko Haram has killed at least 1,300 civilians and
120 soldiers and abducted an estimated 1,000 people. Rehabilitation works on the 205-
kilometer critical road, Mora-Dabanga-Kousseri, by two Chinese contractors were suspended
in 2014 and terminated in 2016 after the kidnapping of Chinese workers by Boko Haram.
The Government proposed that the works be finalized by the Army Corps of Engineers—a high-
capacity military entity, under a results-based approach. The Bank accepted, and the
restructuring was approved by the Bank Board in February 2017. A specific risk management
framework was developed. The social risk is very high due the presence of vulnerable
populations and allegations of human rights violations by the Cameroon military. A TPM
combining an experienced road engineering firm (Louis Berger) with a local nongovernmental
organization (Public Concern) was recruited to supervise the project, since the Bank team
generally cannot travel on-site. The TPM is a critical risk mitigation measure, which brought
specific important skills to help the Bank supervise the project:
• Good knowledge of the road sector and of the fiduciary dimensions associated with the
proposed innovative results-based force account scheme
• Ability to closely monitor the high social risks (for example, possible abuses by the
Cameroon military), through an active engagement with local communities
• Deep understanding of Cameroon’s complicated political economy and ability to connect
and pass messages to both Cameroonian civilian and military entities
• Proven ability to operate in conflict situations and extensive experience in establishing the
right security arrangements for staff and subcontractors
• Knowledge of Bank operational policies and reporting requirements
The TPM has been operational since July 2017 and has since been providing detailed
monthly reports to the Bank on progress, community perception and security.

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 Good Practice Note – Third-party monitoring in the context of the ESF

It is important to note that TPM contracted directly by the Bank is different from the requirement for a
Borrower to use TPM to complement or verify its monitoring activities under the ESF. When the Bank
choses to engage TPM directly, the purpose is to complement the Bank’s ability to monitor projects in
situations where the project may be difficult to access and enable it to carry out its supervision duties.
This may be useful in situations of FCV or where access to a project area is limited for other reasons (see
Box 4 for an example). In such situations, TPM enables Bank teams to have “eyes and ears on the ground,”
for example, during active conflict, and reengage quickly in post-conflict settings where access to Bank
staff remains highly constrained. 8 Box 5 describes TPM of a project where security challenges were
combined with limited Borrower capacity for fiduciary oversight.

Capacity or specific skills required

The Bank may also choose to contract TPM where Borrower capacity to implement and monitor is
limited or where a very specific skill set is needed that the Bank cannot provide. Box 5 provides an
example of TPM where the International Labour Organisation (ILO) was engaged to conduct TPM in
relation to child labor on a Memorandum of Understanding basis.

Box 5. TPM by ILO in Uzbekistan, 2015-2016

Following allegations of child labor and forced labor related to cotton production in
Uzbekistan in 2013, and links to World Bank projects, the World Bank partnered with the
International Labour Organisation (ILO) to conduct Third-Party Monitoring (TPM).
The ILO monitored sites associated with four World Bank projects (Improving Pre-Primary
and General Secondary Education Project (GPE), Second Phase of the Rural Enterprise
Support Project (RESP II, including RESP II Additional Financing), Horticulture Development
Project (HDP), and South Karakalpakstan Water Resource Improvement Project (SKWRIP)).
The monitoring included visits to over 350 sites connected to the projects (approximately
6% of project sites). The work was part of a Memorandum of Understanding (2014) and was
undertaken in 2015 and 2016. The study methodology and scope, as well as the outcomes
and progress made, are presented in the published report:
http://www.ilo.org/wcmsp5/groups/public/---ed_norm/---
ipec/documents/publication/wcms_543130.pdf

Coordination
When the Bank engages TPM directly, the task team should clarify what other agencies and
organizations are doing in the project area to explore where partnerships may be an efficient way to
monitor specific issues. It is important to work with the Borrower to ensure the third-party monitor has
access to all relevant information and access to project-related sites and activities in order to undertake
a successful monitoring role.

8
Third-party monitoring in situations of fragility, violence, and conflict is discussed in detail in FCV Group (forthcoming).

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 Good Practice Note – Third-party monitoring in the context of the ESF

Funding when TPM is on behalf of the Bank

When TPM is conducted on behalf of the Bank, funding for the TPM cannot come from project funds,
but must be sourced through grant financing or other sources. In FCV contexts, the cost of TPM
supervision, where the Bank has restricted access, are extremely high and average over US$2 million per
contract. The amount of time taken to structure, implement, and monitor the TPM is also resource-
intensive.

Box 6: TPM of the Afghanistan Reconstruction Trust Fund (ARTF)

“The World Bank contracted International Relief and Development (IRD), a U.S. CSO, to
provide third-party monitoring of the Afghanistan Reconstruction Trust Fund (ARTF).
Given the security challenges and widespread corruption in Afghanistan, the Bank
wanted a monitoring mechanism that would reliably report on the construction of
village-level infrastructure in areas that were difficult to visit. IRD field engineers are
outfitted with smart phones with data collection applications (apps) developed by IRD
for each type of ARTF project, such as buildings, roads, bridges, and canals. The
individual project survey apps also include social and environmental questions.
The apps also allow the field engineer to record observations, interviews, and
information about the project, which can later be translated as necessary. At the site,
the field engineer uses the smart phone and application to collect required data as
well as take georeferenced photos.
When finished, the data is transferred via a cellular data network or the Internet to an
online data processing system; there it is checked for accuracy and completeness
before uploaded into the ARTF database.
The online project catalogue contains supporting documents such as inspection
reports, drawings, photos, and so on. This provides a comprehensive database of
project implementation and performance.”
Source: “How-to-Notes: Participatory and Third-party Monitoring in World Bank
Financed Projects: What Can Non-State Actors Do?” World Bank Social Development
Department, 2013.

Lastly, it is important to note that TPM contracted for the purpose of enhancing the Borrower’s capacity
to monitor safeguards compliance or generate monitoring and evaluation data does not substitute for
Bank supervision.

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 Good Practice Note – Third-party monitoring in the context of the ESF

ANNEX 1: Resources

“CDD Toolkit, Governance and Accountability Dimensions, Monitoring and Feedback,” World Bank,
Washington, DC.
“CDD Toolkit, Governance and Accountability Dimensions, External level tools,” (including third-parties),
World Bank, Washington, DC.
“Combining Quantitative and Qualitative Methods for Program Monitoring and Evaluation,” PREM Notes,
Number 9, World Bank, Washington, DC, 2009.
“External monitoring of the Chad-Cameroon pipeline projects,” International Finance Corporation,
Washington, DC, September 2006.
FCV Group. Forthcoming. “Approaches to Smart Supervision in Insecure Environments: Third Party
Monitoring and Beyond.” Draft Operational Note. World Bank, Washington, DC.
Handbook on Planning, Monitoring and Evaluating for Development Results, United Nations Development
Programme, United Nations, 2011.
“How to Build M&E Systems to Support Better Government,” Report, Independent Evaluation Group,
World Bank, Washington, DC, 2007.
“How-to-Notes: Participatory and Third Party Monitoring in World Bank Financed Projects: What Can Non-
State Actors Do?” World Bank Social Development Department, World Bank, Washington, DC, 2013.
“Independent Evaluation: Principles, Guidelines And Good Practice,” World Bank, Washington, DC, 2003.
International Labour Organization. 2016. “Third-party monitoring of measures against child labour and
forced labour during the 2016 cotton harvest in Uzbekistan.” International Labour Organization,
Geneva. http://www.ilo.org/wcmsp5/groups/public/---ed_norm/---
ipec/documents/publication/wcms_543130.pdf.
“Peru LNG: A focus on continuous improvement, Lessons of Experience, International Finance
Corporation, Washington, DC, March 2013.
“Strategic framework for mainstreaming citizen engagement in World Bank Group operations: engaging
with citizens for improved results.” English. Working Paper, Number 92957. World Bank, Washington,
DC, 2014. http://documents.worldbank.org/curated/en/266371468124780089/Strategic-framework-
for-mainstreaming-citizen-engagement-in-World-Bank-Group-operations-engaging-with-citizens-for-
improved-results.
“Ten Steps to a Results-Based Monitoring and Evaluation System,” World Bank, Washington, DC, 2004.
“Terms of Reference for Third Party Monitoring of the Chad Cameroon Pipeline,” World Bank, 2000.
“The Baku-Tbilisi-Ceyhan (BTC) pipeline project, Lessons of Experience,” International Finance
Corporation, Washington, DC, 2006.
“Third party monitoring guidelines,” World Food Programme, Rome, 2014.
“Third Party Monitoring Programme for the Afghanistan Reconstruction Trust Fund: A Review,” World
Bank, 2014.
http://www.artf.af/images/uploads/ARTF_Supervisory_Agent_Review_FINAL_March_2014.pdf.

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 Good Practice Note – Third-party monitoring in the context of the ESF

Note: Links accurate as of May 2018 9

9 There are many resources that may be useful in addressing the application of the ESF. The list of resources here is not exhaustive
and do not necessarily represent the views of the World Bank.

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 Good Practice Note – Third-party monitoring in the context of the ESF
ANNEX 2: Template TORs for third-party monitoring

A. Objectives
An introductory section should briefly present the Project, the monitoring goals and objectives and
how it fits in the overall scheme of project implementation.

B. Tasks divided in major project phase, or location or type of activity

This section should provide a general outline of the monitoring program and attach the detailed
ESCP/ESMPs, as well as Resettlement Action Plan, Stakeholder Engagement Plan, or other relevant
documents. The Borrower should highlight any specific incidents/accidents/events/changes in project
or project schedule that need to be taken into account. A link should be provided to the environmental
and social documents, where available on a website, so that the prospective monitor can understand
the complexity of the assignment.
• Planning of monitoring visit: provide proposed parameters (schedule, meetings proposed,
locations, any complex travel logistics, and so forth)
• List of initial documents to be reviewed and data to be made available
• Schedule: For single monitoring trips, preferred timing window and duration of visit. For longer
monitoring assignments with multiple trips: preferred timing window for first visit, estimate of
frequency of visits during each phase (for example, quarterly visits during construction, annual
visits during operation, higher frequency during sensitive phases…), expected duration of each
visit. Expectation of initial and close out meetings for Borrower/Project Implementation Unit, as
appropriate.
• Scope of discussions with stakeholders: provide some context, locations of communities to be
visited (if large-scale project, suggested numbers and locations to be confirmed by selected
monitor), and background on key issues and impacts that might be raised (which can influence
which specialist is most appropriate to undertake the assignment)
• Methodologies to be used, or request expert/monitoring firm to propose methodology
• Any technology requirements, and any specifications for format and content of output needed in
monitoring report, so that the Borrower can access and analyze the information for its own use
and/or reporting

C. Reporting/Outputs
Clarify the focus/purpose of the reports, how findings should be presented/rated, and how
conclusions and recommendations should be presented. Propose changes to ESCP, where
appropriate; updates to the Stakeholder Engagement Plan, and so forth. Reports should be sent to
the Borrower and the Bank at the same time for feedback on any factual inaccuracy. This allows the
Bank to see initial and independent recommendations. To ensure independence and credibility,
evidence-based conclusions and recommendations of the third-party-monitor should be maintained
unless there are factual inaccuracies on which the conclusions and recommendations are based. The
Borrower should provide the Bank with their comments to the monitor regarding the report. In
controversial or complex projects, the draft report may be shared publicly for maximum transparency
and to build trust. Clarify expected language of reporting and intended audience.

D. Qualifications

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 Good Practice Note – Third-party monitoring in the context of the ESF

The TORs should list the following:

• Expertise needed: minimum or range of number of experts, and specialty areas needed to be
covered depending on issues in the scope agreed. These may include: project management and
specialists on environmental or social issues, indigenous peoples, public health, biodiversity,
resettlement, health and safety, labor, communications and stakeholder engagement, and
capacity building.
• Expected level of expertise, such as types of degree or certification (for example, environmental,
social, engineering), and acceptable combination of level of education and years of experience
• Experience with/knowledge of international and World Bank standards, the local context, the
project sector, applicable regulations
• Language skills needed, and confirmation that the contractor will provide support for setting up
logistics locally, such as meetings, clarity on which party will provide translation, and so forth.
• Require CVs of all key personnel and organization’s experience and credentials. These are needed
to demonstrate to the World Bank that the experts/specialists are appropriate for the required
scope of work.
• Once a monitor is accepted, personnel should not be substituted without permission and should
have equivalent expertise.

E. Eligibility/independence requirements
For example (a) absence of existing contracts with Borrower contractors on the project, and (b) no
participation in earlier phases of the project or in the design of environmental or social programs
associated with the project. The more complex and controversial the project, the higher the eligibility
and independence needed.

F. Duration of contract and minimum commitment

Expected minimum and/or maximum duration of contract, as applicable and any minimal
commitment expected from the third-party monitoring provider.

G. Excluded costs
Logistical support, travel and accommodation that will be provided by Borrower that should not be
included in the cost estimate.

H. Conflicts of Interest disclosure

Any past or current arrangements that would prevent the third-party from providing advice
independent of the Borrower and the project

I. Confidentiality and proprietary information

Any specific arrangements for reports and other outputs to be confidential or proprietary to the
Borrower

J. Format of proposal
The TORs should indicate how the cost estimate should be made for undertaking the monitoring
assignment: by task, sub-tasks, expected number of people, and daily rate and/or lump sum. If tasks
in the TORs are not fully defined, clarify how the budget should approach these tasks.

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