IFC partnered with Alto Maipo SpA in Chile for the development of the Alto Maipo hydropower project. According to IFC, the project involved the construction and operation of two high-head, run-of-river hydroelectric facilities with a combined capacity of 531 MW, located approximately 50 km southeast of Santiago.

CAO received a complaint filed by a local organization, La Coordinadora Ciudadana No Alto Maipo, and Ecosistemas, a Chilean environmental NGO focused on ecological and socio-cultural concerns at both the national and international levels, on behalf of affected communities. The complaint alleges that the project will divert the Maipo River, leading to impacts on water access and quality, farming, tourism, and the environment. Additionally, it raises concerns about the project’s impact assessment and claims that construction activities have already affected two communities, notably through noise pollution.

CAO found the complaint eligible for further assessment in March 2017 and an assessment trip was conducted in April 2017. During the assessment, there was a lack of consensus amongst the parties to engage in a CAO-facilitated dispute resolution process. Hence, in accordance with CAO’s Operational Guidelines, the case has been referred to CAO’s Compliance function. 

CAO concluded its compliance appraisal in May 2018 and decided that an investigation was warranted about the issues raised in the Alto Maipo-01 complaint. In reaching this conclusion, CAO has considered several issues. Firstly, CAO notes that this is a category A project, which by definition has potentially significant environmental and social risks and impacts. Secondly, CAO notes that the complaint raises a range of issues regarding project impacts that are serious in nature, and require further expert review. Thirdly, CAO notes that, as part of the regulatory supervision process in Chile, the national environmental authority has raised a number of concerns about project impacts that are aligned with those raised by the complainants. CAO noted, however, that the signatories of the complaint do not include workers employed by the client or contractors of the project. Therefore, CAO has decided to exclude issues raised regarding labor and working conditions.

The case was merged with the Alto Maipo-02 complaint about the purpose of the compliance investigation. CAO published the Terms of Reference for this investigation in August 2018. 

In June 2021, CAO finalized its compliance investigation about the Alto Maipo 01 and 02  complaints and the investigation report was sent to IFC for a formal response.

CAO's investigation found that IFC’s pre-investment review was generally consistent with the requirements of the IFC Sustainability Policy to conduct a review “appropriate to the nature and scale of the activity and commensurate with the level of E&S risks and/or impacts”.  However, about specific issues raised by the complainants, IFC did not ensure the client’s compliance with the Performance Standards requirements. These include lack of consultation with affected communities during the development of the cumulative impact assessment, lack of a comprehensive project alternative analysis, and lack of evidence to support the conclusion that the project enjoyed broad community support.

During supervision of the project, CAO found that the adoption of the adaptive management approach allowed IFC to identify and address several issues in accordance with good international industry practice (GIIP). These include waste rock disposal; prevention of impacts on the arriero community; preventive actions on potential impacts on protected areas and assessment of risks to avoid damages to sites of cultural heritage value during the time of IFC’s involvement in the project. However, adaptive management was not applied systematically to all project aspects. Further, CAO finds that such an approach should not substitute projects’ E&S impact assessment. CAO found that IFC was not in compliance with its Sustainability Policy in relation to the following issues: Infiltration of groundwater during tunneling, sediment transport, biodiversity protection, air quality, noise, tourism, and recreational activities, and IFC’s disclosure of information.

In relation to the second complaint, CAO found that during pre-investment IFC, the lenders took steps to ensure themselves that the client had HR policies and a grievance mechanism in place. CAO finds that IFC’s supervision did not ensure that the client took appropriate measures to prevent and address harassment, intimidation, and/or exploitation, especially about women, as required by Performance Standard 2 (para. 15). CAO further finds that IFC’s supervision did not ensure that the client had in place a grievance mechanism for workers of the company and its contractors that was sufficient to address concerns promptly, using an understandable and transparent process, including the case of sexual harassment brought by the CAO complainant.

On September 16, 2021, the IFC Board of Directors approved IFC’s Management Action Plan and Management Report in response to CAO’s Investigation, and IFC issued the first Management Progress Report on the Implementation of the Management Action Plan, on October 26, 2022.

On May 9, 2023, CAO published its Compliance Omnibus Monitoring Report Q4 2023, which included the first monitoring report regarding IFC’s project-level actions. IFC’s Management Action Plan (MAP) included four project-level actions, which CAO confirmed had been implemented. However, CAO noted that complainants considered these actions insufficient to address project-level impacts.

CAO published its second monitoring report as part of the Compliance Omnibus Monitoring Report for Q3 2025 on April 16, 2025, which provided updates on systemic-level actions. IFC reported issuing guidance on enhanced stakeholder engagement for Cumulative Impact Assessments (CIA), guidance on managing gender-based violence (GBV) for staff, and updates to its Environmental and Social Review Procedures (ESRP) related to the timely disclosure of investment exits. At the time of the report’s finalization, CAO had not received the requested information to verify implementation of the first two actions and noted ongoing gaps in the third.