CAO opens case in Chile on World Bank project Alto Maipo

3 July 2017

In March the Compliance Advisor Ombudsman (CAO), the accountability mechanism of the International Finance Corporation (IFC, the World Bank’s private sector arm), found a complaint on behalf of communities affected by IFC’s investment in the Alto Maipo hydroelectric project in Chile eligible for further assessment (see Observer Autumn 2013). The complaint was filed in January by Chilean environmental NGO Coordinadora Cuidadana No Alto Maipo, Ecosistemas and several international organisations. Groups also filed a similar complaint to the Independent Mechanism for Consultation and Investigation (MICI) of the Inter-American Development Bank (IDB), which was found eligible in May.

According to the CAO, the complainants argued that “the project will lead to diversions of the Maipo river resulting in impacts on water access and quality, farming, tourism and the environment. Further, the complaint raises concerns with regards to the Project’s impact assessment”. The complainants highlighted that the IFC’s and IDB’s financing lacks compliance with the Banks’ own access to information, environmental and social policies. They called for the banks to review if the project complies with their policies and asked the banks not to fund the unexpected cost increases of the project, but instead to divest completely from Alto Maipo.

“This project implies severe and long-term impacts on the Maipo River and the water supply for the Santiago’s metropolitan region,” highlighted Marcela Mella, spokesperson for the Coordinadora, which coordinates hundreds of activists and dozens of organisations against the project. Both the CAO and MICI visited the region in April and heard directly from those affected.

“The policies of IFC and IDB are meant to ensure that projects are designed and implemented after environmental and social issues have been properly assessed to avoid causing harm, this was not the case in this complex project”, added Carla García Zendejas of the Center for International Environmental Law (CIEL). “Now the CAO and the MICI’s investigations can determine if these banks fulfilled their own rules and obligations.”