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 former worker with the AES Gener Foundation, who is also a resident of the Cajon del Maipo and whose work focused on the Alto Maipo project. The complainant alleged that while she was working for the company, she was sexually harassed by one of her colleagues. The complainant raised concerns about 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.

In August 2017, CAO found the complaint eligible for further assessment. 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 was referred to CAO’s Compliance function.

In May 2018, CAO concluded its compliance appraisal 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 indicated concerns regarding other allegations of sexual harassment, at the level of the company and contractors, in addition to those brought by the complainant. CAO had 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 had questions as to the application of Performance Standards 2 (PS2) requirements regarding the handling of worker grievances (para. 20).

The case was merged with the Alto Maipo-01 complaint at the start of the compliance investigation.

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, regarding specific issues raised by the complainants, IFC did not ensure the client’s compliance with the PS requirements. These include a lack of consultation with affected communities during the development of the cumulative impact assessment, a lack of a comprehensive project alternative analysis, and a 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 for potential impacts to protected areas, and assessment of risks to avoid damage 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 found that such an approach should not substitute the project's environmental and social (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, recreational activities, and IFC’s disclosure of information.

In relation to the second complaint, CAO found that during pre-investment, the lenders took steps to ensure that the client had human resources (HR) policies and a grievance mechanism in place. CAO found 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 PS2 (para. 15). CAO further finds that IFC’s supervision did not ensure that the client had a grievance mechanism in place 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 (MAP) 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 published its Compliance Omnibus Monitoring Report Q4 2023, which included the first monitoring report regarding IFC’s project-level actions. IFC’s 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.