Main current projects and managing relocation

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Every infrastructure project faces evaluation by the communities affected; in some cases, there are criticisms or the project does not have full support. Sometimes, despite the broad consensus of the local communities and institutions, there is opposition from some civil society movements or environmental associations. The involvement of the parties concerned in the planning processes and in the development of infrastructure is an essential element. In some cases the construction of new plant may entail the relocation of part of the resident population to nearby areas. Managing relocation inevitably involves the populations or individuals affected and a careful assessment of the psychological and social problems that can be expected at both individual and group level.

The approach to choosing potential sites is that of minimizing, as far as possible, the need to relocate the population. When establishing the potential sites for the development of energy projects, studies are conducted which include economic, political, cultural and social and demographic aspects, including analysis of the daily life of the communities who live in the area affected, the population distribution, the forms of organization, and the levels of employment and pay. In the cases in which relocation is inevitable, compliance with the legislation in force in the country concerned is guaranteed, as well as with any local laws which specify the conditions for the relocation and the means for calculating the related compensation.

Enel’s sensitivity to this issue is also clear in the human rights policy approved in 2013 by the Board of Directors. Below are details on the most important current projects, the positive and/or negative (real or ‘feared’) impacts on the local area and how the Group companies involved are promoting a proactive dialogue to arrive at solutions which are as widely shared as possible.

Enel’s Strategic Plan 2016-2019 increasingly focusses on the growth of renewables, leaving behind investments in coal-powered plants and the construction of major infrastructure projects with a high environmental impact. This strategy enables the Group to be more flexible and to minimize impacts.

Cile – NeltumeChile – Neltume

Neltume is a project relating to a hydroelectric run-of-theriver plant, with installed power of 490 MW, in the Municipality of Panguipulli, in the Region of Los Ríos. The realization of the hydroelectric project involves the so-called “ceremonial ancestral site” of the indigenous populations that live in the area and some families have opposed the realization of the project due to its impact on the traditions of the community. In 2006 Endesa Chile started a consultation process with the indigenous communities in order to incorporate their requests into the development of the project. In particular, since 2007 there have been information offices in the towns close to the project area and in 2011 some contact was made with the Casas Abiertas communities to facilitate their participation.

In line with the Group’s new sustainability strategy and relationships with communities, Endesa Chile, aware of the culture and traditions of the local area, decided to look at new project alternatives, in particular as regards the discharge into Lake Neltume, an issue raised by the indigenous communities in the various discussions. At the end of December 2015 Endesa Chile withdrew the environmental impact assessment (VIA) for the power plant, which was already being assessed by the Servicio de Evaluación Ambiental (SEA) of the region of Los Ríos. The decision concerned only the project for the Neltume power plant and not the transmission project, which is still being assessed by the SEA.

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IThe new design for the Neltume project will require a series of additional technical and environmental studies. This process will be undertaken by creating opportunities for collaboration and common vision with the local communities and authorities. Endesa Chile’s purpose is to realize a development project in harmony with the surrounding local, social and environmental context, in line with the energy requirement of the region and of the country. This new stage will take into consideration the agreements which have already been made with the cities: those made in the notarial agreements signed before delivery of the VIA and those made within the framework of the indigenous consultation.

Cile – centrali idroelettriche dell’Alto Bío Bío (Ralco, Pangue y Palmucho)Chile – hydroelectric power plants of the Alto Bío Bío (Ralco, Pangue y Palmucho)

In the eighth region of the Bío Bío, Enel has three hydroelectric power plants in the area of the Alto Bío Bío, a region with a significant presence of the Pehuenche indigenous community.

The operations of Endesa Chile in the region of the Alto Bío Bío have impacted with 12 communities consisting of over 1,500 families, in total around 7 thousand people.

During 2015 working groups continued with eight communities: Pitril, Callaqui, El Avellano, Aukiñ Wallmapu, Quepuca Ralco, Ralco Lepoy, El Barco, Ayin Mapu. These groups were formed by the executive councils of the communities and the discussion group of Endesa Chile. Endesa Chile is assessing the possibility of creating working groups with the remaining four communities (which are in the Cajón del Queuco), with reference to its guidelines in the field of sustainability and community relationships.

8 WORKING GROUPS

MORE THAN 1,500 FAMILIES AND 7 THOUSAND PEOPLE IN THE AFFECTED AREAS

302 MILLION CHILEAN PESOS (AROUND 415 THOUSAND EURO) DESTINED TO SOCIAL INVESTMENT PROJECTS, THROUGH THE FUNDACIÓN PEHUÉN

Here below are some projects realized in 2015.

Installation of drinking water in the community of Callaqui

In line with the commitments to improve the quality of life of the communities resident around the power plants, Endesa Chile financed part of the water purification project in the community of Callaqui.

This initiative, which responds to the needs identified by the local authorities and representatives of the community, required an investment of 200 million pesos (around 275 thousand euro) by the company, and has a direct impact on 115 families, around 575 people, who can take advantage of the benefits of drinking water.

Restructuring the facilities in the campsite at Laguna El Barco

This initiative includes the repair of bathrooms and cabins on the campsite, in order to improve the service which the Pehuenche community of El Barco offers tourists who visit Laguna El Barco, which is in the same area.

The project directly affects the 103 families who make up the community and indirectly around 4 thousand tourists who visit the area during the summer. The investment made by Endesa Chile was 11.2 million pesos (around 15 thousand euro).

Cile – Centrale di BocaminaChile – Bocamina plant

In 2008 Endesa Chile, at the same time as building the second unit of the thermoelectric power plant at Bocamina (Bocamina II), in the Municipality of Coronel, started the relocation of the families affected by the project, in line with the agreements signed with various organizations and part of a commitment to support the community in improving its quality of life and the surrounding environment. The power plant started operating in 2012 and as from December 2013 seven Recursos de protección were presented by various opponents of the plant (for example fishermen). All the appeals are now completed. In August 2013, the Superintendencia del Medio Ambiente (SMA) informed Endesa Chile of the opening of sanction proceedings for alleged environmental infractions, which ended in August 2014 with the imposition on the company of penalties for a total of around USD 7.6 million. Endesa Chile and the local fishermen appealed this decision. The Tribunal Ambiental de Valdivia, with its decision of March 27, 2015, rejected Endesa Chile’s appeal and also ordered the SMA to increase the fine taking into consideration the fact that Endesa had committed the infraction intentionally. Endesa Chile appealed this decision before the Cassation Court, which rejected the appeal in its decision of January 5, 2016.

In regard to relationships with communities, the main objective of Endesa Chile, in keeping with a new approach to social issues, is to guarantee the progress and sustainability of the plan defined with the community of Coronel, which stresses a long-term approach, as well as promoting initiatives defined with the involvement of various social actors. Proving this commitment, in 2015 discussions and agreements continued with the Municipalities of El Mirador, La Colonia and Cerro Obligado, also involving the main exponents of the public sector nationally and locally.

In this context, also the plan to relocate the families close to the power plant continued. In the period 2008-2015, 720 families were relocated, many of which did not have ownership rights. The plan was realized with the involvement of Comité de Viviendas, the Municipalidad de Coronel and the Servicio de Vivienda y Urbanización (Serviu) de la Región del Bío Bío and financed by Endesa Chile and Serviu. Endesa Chile facilitated the purchase of the land and homes, which was completed with the support for the transfer of the ownership and registration of the title. Following this work only 4 families remain in the area of the power plant.

The main activities to improve the socio-economic conditions of the communities in 2015 mainly concerned the following programs:

  • Energy for your education (Energía para tu emprendimiento)

It responds to the need to promote initiatives for the people who are involved in commerce or manufacture and who are permanently resident in the community of Coronel. The dedicated fund enables the financing of 60 initiatives which can count on the support and consulting services of experts in this type of program. The annual amount set aside is 300 million Chilean pesos (around 410 thousand euro).

  • Fund for the creation of shared value

This is a program worth 180 million Chilean pesos per annum (around 250 thousand euro) for the whole useful life of the Bocamina II power plant (around 30 years). The resources are destined to the Corporación Municipal de Desarrollo de Coronel, focusing on initiatives for energy efficiency, education and social and economic development.

Social and community responsibility

As part of the Coronel Social Plan, in 2015 the new kindergarten and pre-school were opened in Rayun (area of La Peña) for more than 100 boys and girls. In the same vein of promoting education, the Endesa Chile- Coronel Football School Cup was held, which is part of the Energy for education program. Over 300 students took part from 19 schools in an activity which aims to combine training with positive values associated with sport and fun.

Colombia – El QuimboColombia – El Quimbo

El Quimbo is the most important engineering project undertaken by the Enel Group in recent years and one of the biggest hydroelectric investments realized in South America. With installed power of 400 MW the plant is located in the region of Huila, around 350 km south-west of Bogotá. The plant, which is fed by the Río Magdalena, the country’s biggest river, crosses 6 towns (Gigante, Garzón, Altamira, El Agrado, Paicol and Tesalia). An overall investment of around 1.2 billion US dollars, which enabled the realization of a major action plan in favor of the local populations, including the construction of new homes, the construction of new bridges, including the largest viaduct in the country, as well as initiatives to protect biodiversity in the area, such as the restoration of over 11 thousand hectares of tropical vegetation on the left bank of the basin and the realization of veterinary help centers.

Avanzamento delle opere di costruzione

Progress of the construction works

In June 2015 work started to fill in the basin after the completion of the main civil engineering works, which enabled the activation of the first of the two units of the power plant. With the subsequent activation of the second unit the power plant can produce around 2.2 TWh per annum, enough to guarantee coverage of around 4% of the country’s electricity demand. In addition, the coming into operation of the plant contributed to reducing the impact of the country’s electricity supply crisis due to the phenomenon of El Niño which caused drought conditions.

Right from the start of the project, Emgesa, the Group’s power generation company in Colombia, has shown its openness to dialogue with the regional and national stakeholders and has developed a social and environmental management plan. On an agreed and participatory basis, specific initiatives have been established for resident or landowning families in the area affected by the project, as well as those who work or undertake commercial activities or services in the area. The program is also targeted at the people who used to undertake informal business locally. The families, which have been surveyed and have the envisaged prerequisites, can decide between (collective/individual) relocation or sale of their land in relation to what enables them to improve the quality of their life.

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Social and cultural management

150 families have opted for relocation: 112 of these have chosen 4 collective facilities, with new 100 m2homes equipped with essential services and set in an urban context with 3 schools, 3 churches, multifunctional sports centers, 1 football pitch, 4 parks, 4 waste recycling centers and 5 waste water treatment plants.

38 families have chosen individual relocation: 11 families have received five hectares of land to undertake a production project together with a related technical plan, the other 27 families have received 180 m2 homes.

In addition, since the start of construction 231 land purchases have been completed for families who did not opt for relocation.

In 2015 numerous activities were organized aimed at promoting tradition and culture, including specific events in the collective housing (“El baúl de mis abuelos” and “Festival por mis Ancestros”) and a rural exhibition “Los frutos de mi tierra”. 36 group sessions were held in order to promote better quality of life. 6 women in vulnerable situations were included in a program to define an economic plan which, through concrete actions, enables them to overcome this situation.

In addition, a study was undertaken to identify the index of the living conditions of the relocated families, in order to assess the effectiveness of the infrastructure and the services envisaged. The results of the study showed that around 90% of the relocated families are in homes with a high level of access to quality public services.

As part of the “project to repay the commitment”, a specific strategy was defined, “Empreendedores con Energía”, which involves providing initial capital and training courses to around 2 thousand people who carried out their business in the area affected by the project (non-residents or residents who do not have property). 60 training courses have been provided by SENA (Servicio Nacional de Aprendizaje), from which over 1,850 people have benefitted.

(the data given represent the total value since the start of the project)

Environmental management

During 2015 specific environmental programs were defined in order to prevent, manage and monitor environmental impacts connected to the project. Besides the recovery of over 11 thousand hectares of tropical vegetation on the left bank of the basin and the realization of veterinary support centers, 20 new species were identified and classified in accordance with the Red List of the International Union for the Conservation of Nature (IUCN).

In particular the following were established:

  1. Management plan for wildlife, which enabled the assistance and saving of 30,635 animals;
  2. Management program for fish and fishing;
  3. Program to save fish;
  4. Ecological restructuring plan;
  5. Management plan to cover the flora and land habitats.

Emgesa, the Group’s Colombian company, has established specific communication channels to provide information and respond to all the community’s questions regarding the project. Monthly meetings were held with interested national and international groups, periodic monitoring meetings with the government of Huila, towns, environmental authorities, control bodies and representatives of society and guided visits to the project were undertaken (in 2015, 40 visits involving around 800 people).

Further information is available in the Sustainability Report 2015 of Emgesa and on the website dedicated to the project.

Legal proceedings

Despite this intensive relationship-building and involvement of the communities, there are also some legal proceedings (“acciones de grupo” and “acciones populares” – class action) launched by local inhabitants/fishermen. In particular, a first ”acción de grupo”, which is now at the preliminary investigation stage, was taken by around 1,140 residents of the Municipality of Garzón who complained that the construction of the power plant would reduce revenue from their business by around 30%. A second case was brought between August 2011 and December 2012 by inhabitants and companies/associations from the five towns of Huila for alleged damage in relation to the closure of a bridge (Paso El Colegio). In relation to the so-called acciones populares, in 2008 some local inhabitants started proceedings to ask, among other things, for the suspension of the environmental license. A further acción popular was launched by some fishing companies in relation to the alleged impact of the refilling of the El Quimbo basin on fishing in the Betania basin, downstream from El Quimbo. In February 2015 the Court ordered the suspension of the refilling until some specific requirements were met. The suspension was subsequently changed, thus allowing the filling of the basin. This started on June 30, 2015. However, on July 3, the CAM (Regional environmental authority) issued a measure (medida preventiva) ordering filling operations to be suspended temporarily. Given the technical impossibility of suspending filling operations, on July 17, 2015 Emgesa received a notice modifying the precautionary measure to prohibit generation activities until ANLA (the national environmental authority) certifies that the company has removed biomass and forest waste from the Quimbo reservoir basin. In September 2015 ANLA issued two reports which, in general, confirm that the company had fulfilled the requirements and consequently on September 21, 2015 the company asked the court to lift the precautionary suspension. Pending the ruling, as an energy emergency had been declared, the Ministry of Energy issued a decree authorizing Emgesa to begin electricity generation. Subsequently, on December 16, 2015 the Constitutional Court ruled that the presidential decree was unconstitutional and as from that date Emgesa suspended electricity generation.

On December 24, 2015, the Ministerio de Minas y Energía and the AUNAP (Agriculture and fishing authority) filed a joint motion (acción de tutela) asking the criminal court to authorize generation as a precautionary measure. On January 8, 2016, the court granted the precautionary measure requested by the Ministry and the AUNAP, authorizing the temporary and immediate resumption of generation at El Quimbo. The precautionary measure granted by the court would remain in force until the Huila court issued a ruling on the substance of the case, i.e. on the revocation or upholding of the precautionary measure previously issued by the local administrative court. With a decision of February 22, 2016 the Huila court issued a ruling allowing generation to continue for six months. The court ordered Emgesa to prepare a technical design that would ensure compliance with the oxygen level requirements and to provide collateral of about 20,000,000,000 Colombian pesos (around 5.5 million euro at the exchange rate on February 22, 2016).