IFC has an active project with Alto Maipo SpA in Chile. According to IFC, the project comprises the construction of two run-of-the-river hydroelectric facilities connected in series with a combined capacity of 531 MW for the purposes of providing baseload electricity to the Chilean Central Interconnected Grid or SIC. AES Gener is the IFC Sponsor for this project. 

CAO received a complaint filed by a former worker with the AES Gener Foundation and resident of the Cajon del Maipo, whose work focused on the Alto Maipo project. The complaint alleges that while she was working for the company, she was sexually harassed by one of her colleagues. The complainant raises concerns with regards to the appropriateness of the company’s response to her reporting the harassment internally, and thus to the proper functioning of the company’s internal grievance mechanism.

CAO found the complaint eligible for further assessment in August 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-02 complaint. The appraisal noted that CAO has generally not initiated compliance investigations in response to individual employment-related disputes. In this case, however, IFC project documentation indicates concerns regarding other allegations of sexual harassment, at the level of the company and contractors, in addition to those brought by the complainant. CAO has identified questions as to IFC’s application of requirements that the “client will take measures to prevent and address harassment, intimidation, and/or exploitation, especially in regard to women” (PS2, para. 15). Given the issues raised by the complainant, CAO also has questions as to the application of PS2 requirements regarding the handling of worker grievances (para. 20).

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 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 cleared CAO's investigation, and IFC’s official response, including a Management Action Plan and the first Management Progress Report on the Implementation of the Management Action Plan, was published on October 26, 2022.

On May 9, 2023, CAO decided to close its monitoring process in relation to IFC’s project-level actions. IFC’s MAP made four project-level actions. CAO’s monitoring has concluded that IFC implemented these actions. However, CAO notes the complainants’ assertion that these actions were insufficient to resolve complainant concerns for project-level impact.  CAO has decided to keep three systemic-level actions committed to in IFC’s MAP open for additional monitoring.

An omnibus monitoring report is available in English and Spanish in the “Case Document” section below, detailing more information about the project-level and systemic-level actions taken by IFC.